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Stainless scrap prices fall to 2009 low

Keywords: Tags  stainless scrap, scrap demand, stainless scrap prices, London Metal Exchange, LME, scrap processors, scrap dealers, nickel prices Daniel Fitzgerald

NEW YORK — Stainless steel scrap broker/processor buying prices have fallen to their lowest levels since June 2009, with market participants lamenting a lack of domestic or export demand amid plunging nickel prices.

Type 304 solids dropped to a range of $1,275 to $1,335 per gross ton, down from $1,345 to $1,410 previously; 304 turnings fell to $1,120 to $1,175 per ton from $1,185 to $1,250; and 316 solids slipped to $1,960 to $2,015 per ton from $2,000 to $2,065.

It is the lowest processor buying price for 304 solids since early June 2009, when it traded in a range of $1,150 to $1,175 per gross ton.

The decline in stainless prices follows decrease in the London Metal Exchange price of nickel, one of the primary raw materials in the production of stainless steel.

Cash nickel prices closed the official session on the LME June 18 at $14,025 per tonne ($6.36 per pound), down 3.2 percent from $14,495 per tonne ($6.57 per pound) a week earlier.

Nickel prices also are at their lowest levels since mid-2009, with analysts attributing the drop to a global surplus in supply and concerns over demand (, June 11).

Stainless scrap market participants painted a gloomy picture of scrap demand, saying that both domestic mills and exporters are showing little interest in purchasing.

“Everyone is very nervous about orders for next month. The alternatives to go elsewhere are now few and far between because the Indians just stopped buying,” one processor source said.

“It’s quite difficult; things are tough,” a second processor source said. “There’s a lack of excitement, lack of orders and lack of profitability among producers. We’ve been in a summer slowdown for a couple of months and we’re not getting any better. And there is almost no export demand to offset this; I keep reading about the Chinese lowering their breakeven costs on NPI (nickel pig iron).”

A third processor source speculated that stainless scrap prices could remain at current levels for several months. “People are saying the new norm will be in the 50s (per pound) and then the 40s (per pound) for 304,” he said.

Meanwhile, scrap dealer buying prices also dropped, with 304 solids falling to a range of 45 to 47 cents per pound from 48 to 50 cents previously.

“I’m hearing that there’s not much demand for stainless right now,” one dealer said.

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