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Stainless scrap prices up; processors wary

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

NEW YORK — Stainless scrap demand has improved, reportedly spurred by an increase in nickel prices, although some processors question whether the price rise will continue.

Processor buying prices for Type 304 solids moved up to a range of $1,345 to $1,415 per gross ton Aug. 19 from $1,300 to $1,360 previously, while 304 turnings moved up to a range of $1,200 to $1,255 per gross ton from $1,150 to $1,200. All other processor buying prices and all dealer prices were unchanged.

The London Metal Exchange’s cash nickel contract closed the official session Aug. 20 at $14,565 per tonne ($6.61 per pound), up 1.3 percent from $14,375 per tonne ($6.52 per pound) Aug. 13.
The increase comes as nickel prices have rebounded slightly over the first half of August, rising 7.3 percent from $13,570 per tonne ($6.16 per pound) on July 30.

Rising prices are encouraging many processors to seek more material while stainless scrap prices remain relatively low, although some doubt that the increases are underpinned by fundamentals.

“Things are getting a little warmer price-wise. I think everybody expected the nickel rise to be a blip and it would crash back down, but it’s staying here, so we’re starting to accept the reality of the new nickel level,” one processor said. “I can’t understand it—you’ve got record stocks on the LME, poor demand, it seems strange. I can only assume it was a speculative thing.”

“There’s a little more frenzy on the 18/8 (Type 304), and people are looking for secondary product,” a second processor said. “I still have the nagging feeling that the overall rise in nickel is suspect. I’m not sure what’s causing it, especially when you have this very visible stock issue. It’s better that it’s up rather than down, even if its artificial, because it may stimulate order entries at the mill as people don’t want to miss out.”

However, a third processor said he wouldn’t know until the end of the month whether the nickel rise would boost consumer demand for scrap.

Global nickel stocks in LME-listed warehouses stood at 205,758 tonnes Aug. 16, including 1,410 tonnes stored in warehouses in Chicago and Detroit.

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