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Why Stainless Steel Scrap Gain Favor? SMM Reports
Aug 22,2017 14:26CST
smm insight
Source:SMM
Recently, stainless steel scrap is increasingly favored by some downstream producers.

SHANGHAI, Aug. 22 (SMM) – Recently, stainless steel scrap is increasingly favored by downstream producers, and some domestic stainless steel mills told SMM that they have already increased or planned to increase purchases and using of stainless steel scrap.

Why?

China Low-Grade NPI Price Keeps Rising, SMM Reports

According to SMM data, prices of stainless steel scrap and high-grade NPI had been advancing with LME nickel from late July to early August. Price gains of high-grade NPI were higher than those of stainless steel scrap, and prices of ferrochrome and pig iron increased significantly in August, with ferrochrome gaining as much as 13 per cent from the level seen in late July, growing consumption advantages of stainless steel scrap.

Raw Materials

#304 Stainless Steel Scrap

High-carbon  ferrochrome

Pig Iron

High-grade NPI

Up from late Jul. to Aug. 17

6%

13%

5%

7%

Source: SMM

Hence, some domestic steel mills increased using of stainless steel scrap. But, not all mills plan to increase the usages due to following three factors.

What’s Raw Material Choice at China Stainless Steel Mills after NPI Shortages and Price Rise? SMM Reports

First, furnace’s type and specification restricts input ratio of raw materials. Second, profits are acceptable to them, and they will not adjust their raw material structures unless stainless steel scrap enjoys significant consumption advantages. Third, it is difficult to get VAT invoice for stainless steel scrap after China’s reform of replacing business tax with value-added tax, restricting usage of stainless steel scrap.

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