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Domestic stainless scrap prices diverge

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

NEW YORK — Prices for 300-series stainless steel scrap have taken another hit along with plunging terminal nickel markets, while 400-series stainless has risen on the back of higher iron prices.

Broker/processor buying prices for 304 solids dropped to $1,175 to $1,230 per gross ton from $1,200 to $1,255 previously, while 316 solids dropped to $1,825 to $1,900 per ton from $1,850 to $1,925.

Dealer prices also fell, with 304 solids at 40 to 42 cents per pound (f.o.b. Pittsburgh) vs. 42 to 44 cents previously.

However, broker/processor buying prices for 400-series stainless scrap strengthened, with market participants attributing the move to rising iron prices. The price range for 430 solids widened to $425 to $465 per ton from $425 to $450 previously, while 409 solids moved up to $375 to $425 per ton from $350 to $400.

The cash nickel contract on the London Metal Exchange closed the July 9 official session at $13,160 per tonne ($5.97 per pound), down 5.4 percent from $13,915 per tonne ($6.31 per pound) a week earlier.

Market participants told AMM that falling nickel prices and a lack of trading activity continues to pressure 300-series prices.

"People are very nervous about July and August. The U.S. market is lagging behind everyone else, so a lot of people are exporting now. You can get 58 to 59 cents per pound export for 304, so basically the numbers are better elsewhere," one processor source said.

Competition for business remains "ultra-competitive," a second processor source said. "It’s difficult. The mood of consumers is very cautious. There’s a reason for their very conservative business stance: Nobody in the stainless sector has had a reasonable chance at profitability for quite a while, and it’s unrelenting."

Meanwhile, dealer prices are likely to fall further, one dealer source said, noting that a processor reportedly dropped its buying prices by 7 cents per pound ($157 per gross ton), creating significant pressure on dealer margins. "It’s like 2008. It’s becoming quite traumatic," he said.

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