NEW YORK Stainless scrap broker/processor buying prices have dropped again on the back of plunging official nickel prices and a continued lack of mill demand.
Type 316 solids dropped to a range of $2,075 to $2,130 per gross ton from $2,150 to $2,200 previously, while Type 304 solids dropped to a range of $1,400 to $1,455 per ton from $1,450 to $1,525 previously.
Type 304 turnings also decreased to a range of $1,250 to $1,300 per ton from $1,300 to $1,350 previously, while 430 solids tightened to a range of $465 to $495 per ton from $465 to $500 previously.
The cash nickel contract ended the London Metal Exchanges official session at $15,730 per tonne ($7.14 per pound) April 16, down 2.1 percent from $16,070 per tonne ($7.29 per pound) a week earlier.
The price has been dropping closer to the vaunted $7-per-pound mark, having closed at $15,455 per tonne ($7.01 per pound) on April 15, when market participants were contacted by AMM.
Scrap exists only as an alternative to prime metal, so when prime goes south, scrap has got to follow, one processor said. We were in the (sub-$7-per-pound range) for a little while in August 2012, so its not unprecedented, but it feels a little sloppier now than it did then.
Several sources told AMM they expect trading activity to weaken as dealers look to avoid selling while prices are depressed.
I think with this dip weve taken (in official pricing), its going to get quieter, one dealer said. People are resistant to sell. They think it may bounce back.
Some people are just going to put their heads inside their shells, the first processor said. Prices will fall to a point where it freezes any action, though people will refuse to sell only at the point where they think they have upside.
Its difficult to establish firm parameters when things are falling this quickly, he added. Nobody knows what is happening or where it will end up. People are always looking for where it is going to settle, but I think the markets are looking for new floors.
A second processor described mill demand as dead.
Meanwhile, dealer prices were unchanged, with one source saying that he has yet to determine peddler pricing while official markets are in flux.