NEW YORK Stainless scrap processor buying prices have held steady amid waning demand and tight supply, and market sources say some dealers are holding material until prices improve.
Prices for 304 clips and solids remain unchanged in a range of $1,525 to $1,570 per gross ton, while 316 solids and clips remain at $2,200 to $2,260 per ton.
Business is scant due to patchy demand from stainless scrap consumers, dealers and processors told AMM.
"Demand is weak," one processor said. "The mills bought less for March, and the indications are for weak demand in the second quarter."
However, supply is also said to be tightening, with dealers holding off on selling material.
"A lot of scrap dealers hate the price and will pile (the scrap) up until prices improve," a second processor said.
"A lot of dealers are holding in the hope that 304 will go back up to 80 cents per pound ($1,790 per ton) or above," the first processor added.
One scrap dealer argued that this strategy could backfire if prices continue to fall. Dealers "are going to think (current) numbers are good soon," he said.
"The problem is theres nothing coming in the door, and that will continue to be the problem as we go forward," he added. "Its the same old story: a lack of material and too many scrap dealers. Everybody is short. Its holding prices for now, but theyll continue to weaken in small amounts. With stainless, theres very little demand so its just going to keep drifting."
The cash nickel contract ended the London Metal Exchanges official session at $16,970 per tonne ($7.70 per pound) March 12, up 2.8 percent from $16,505 per tonne ($7.49 per pound) March 5.