NEW YORK Stainless scrap consumer buying prices have risen on the back of stronger nickel prices in December and restocking by stainless mills, although some processors say demand in the new year has nonetheless been below expectations.
"Its better than November and December, but we were thinking it was getting much better than what it is," one processor source said.
"I talked with (a stainless steel producer) yesterday and they havent seen any kind of increase in demand at this point," a second processor source said Thursday.
Consumers are currently paying between $1,790 and $1,865 per gross ton for 304 clips and solids, up from between $1,700 and $1,770 per ton previously, while prices for 316 clips and solids have risen to between $2,420 and $2,465 per ton, up from $2,350 to $2,400 per ton previously.
Some processors and mills had reported earlier in the week that demand in January had risen, pushing up processor buying prices, though some sources cautioned that they had not seen a significant pickup (amm.com, Jan. 8).
"The processors have swallowed the exuberant pill. They expected very, very strong (consumer) pricing in January, but theres not anything to warrant that," a third processor source said.
The rise in buying prices and the smaller-than-expected gain in selling prices have led to tight margins in the industry, sources said.
In addition to January restocking by mills, the start of Outokumpu Stainless USA LLCs melt shop in Calvert, Ala., has been touted by some as a boon for the market this year (amm.com, Jan. 2), but sources said consumption there is still small as the facility is in ramp-up mode.
"Its not an adult and he doesnt eat full meals yet," the third processor source said.
Even with demand below expectations at this point in the year, sources said there could be some tightness in 316 scrap supply in the coming months.
"On 316, theres just not a lot of scrap available," the second processor source said.
Meanwhile, the cash nickel contract on the London Metal Exchange has averaged $17,375.71 per tonne ($7.88 per pound) so far in January, down slightly from $17,406.58 per tonne ($7.90 per pound) in December, the basis for Januarys pricing.