05 Nov 2013 Last updated at 05:29:08 GMT
 
BRUSSELS (Scrap Monster): The increased use of nickel pig iron (NPI) by Chinese stainless steel industry has lead to major slump in scrap requirement. The continuously growing internal and external scrap volumes may create a stainless scrap ‘bubble’ in the coming years, observed BIR Stainless Steel & Special Alloys Committee in its meeting held in Warsaw recently.

Over the past decade, NPI’s share of the Chinese stainless steel industry’s external raw material purchases rose to 57%, whereas the external scrap requirement plunged from 52% to 11%. The country’s stainless scrap reserve is expected to climb by over 200% to touch 62.2m tonnes by 2020. Further, the scrap reserves may soar to 164m tonnes by 2030. The stainless steel industry’s inclination towards the NPI may ruin the scrap industry in the country.

Also, global stainless melting production would climb 5.9% to around 37.9m tonnes this year and a further 6.5% next year to 40.37m tonnes; however, output in China was expected to jump 13.8% this year and 10.1% in 2014 to 20.5m tonnes, or more than half of the world total. For the same two years, EU production was deemed likely to fall by, respectively, 5.2% and 2.3% while increases of 3.5% for 2013 and 12.3% for 2014 were envisaged in the USA.

The meeting cited that the series of stainless steel capacity expansions in China may further aggravate the rising global oversupply crisis.

Author: Paul Ploumis