Stainless Steel Me

Prices for stainless steel scrap are on the increase. In Japan prices have risen by over 5000 YEN , a  similar picture is being reported in central Europe where prices are around 1200 Euro (1680 USD). A combination of recent increases in the  Nickel price(over $20000 per tonne on the LME) along with increased demand for stainless steel have fuelled prices.  Egypt’s Ministry of Trade and Industry decided to reduce the exports tariff imposed on scrap stainless steel to EGP 750 from EGP 1,500.

Real demand for stainless is still low the new growth appears to be coming from China with European and US markets still flat. The key test will come in Q4 when all industries are back from summer vacations and true demand is reflected. Although signs of a recovery are under way the comment form the governor of the Bank of England Mervyn King sums it up when he says “the recovery is fragile”. With one of the main Nickel producers Vale at Sudbury in Canada on strike and a general increase in demand for commodities, the outlook for scrap stainless is better.

Potentially prices for scrap still have some way to go historically prices have peaked around 2200 -2400 USD per tonne so if real demand for stainless increases in 2010 and Nickel prices remain strong these highs should be repeated.