NEW YORK Stainless steel scrap consumer buying prices have risen on the strength of primary nickels higher August average, but the market could be in for a sharp decline next month if exchange prices continue to fall through September, sources said.
AMMs monthly consumer buying price for Type 316 solids rose to $1,900 to $1,975 per gross ton from $1,875 to $1,950 previously, 304 solids increased to $1,400 to $1,475 per ton from $1,390 to $1,450 and 304 turnings rose to $1,250 to $1,300 per ton from $1,225 to $1,275, while 430 bundles stayed flat at $590 to $610 per gross ton and 409 bundles were steady at $510 to $535 per ton.
The London Metal Exchanges three-month nickel contract averaged $14,359.53 per tonne ($6.51 per pound) in August, up 4.2 percent from $13,781.42 per tonne ($6.25 per pound) the previous month.
With September nickel prices plunging toward July levels and LME nickel stocks continuing to rise, some sellers expect consumer buying prices to slip.
"Its fallen off in the last few days as the nickel price has trailed off. ... Were seeing where the big players are playing with their price. The price is floating around based upon the need to get material through the plants rather than what the market indicates," a processor source said.
"It was overwhelmingly the difference between July and August nickel," a second processor source said of increasing consumer buying prices.
The nickel price has "subsequently given all of that back; nickel now is under the July average. Were under water from July, but no one can tell you whether that will last," he said. "Of course, its also about how much (consumers are) melting. Melt rates have been average, and it feels like theyre staying that way. Scrap availability is maybe getting tighter, so that may lead toward an incremental increase in pricing."