Stainless Steel & Special Alloys Committee, recent BIR World Recycling Convention & Exhibition, Dubai (16) 17 – 18 October 2022:
Tackling excessive water leakage rates in major cities has been advocated as a way of boosting the stainless steel industry and offering fresh market opportunities for scrap recyclers and traders. The challenge of losing huge volumes of such a vital resource as water was set out at the BIR Stainless Steel and Special Alloys Committee during the global recycling organisation’s Dubai Convention on October 17.
During his presentation “What’s ahead for 2022/23 and beyond? From Red-Hot to Ice-Cold”, Robert Messmer, Chief Analyst Raw Materials, Steel & Metals Market Research (SMR) GmbH, identified greater use of more durable stainless steel piping as a way of cutting the average 26% of drinking water lost by distributors in Europe. For example, the cities of Naples, Oslo and Glasgow each lose more than 30% and the total is worse in others around the world. However, other cities such as Tokyo, Seoul and Taipei have introduced stainless steel pipes and cut leakage by over 10%, 25% and 15% respectively.
“Stainless steel is the solution even in times of earthquakes and other problems – the pipes stay functioning,” said Mr Messmer. “There may be higher [initial] investment costs but maintenance costs will be lower.”
Turning to more widely adopted end uses, the specialist pointed out that traditional uses of stainless steel in the automotive industry, such as in exhaust units for internal combustion engines, are diminishing as the industry moves to electric vehicles. But its importance in this sector could be over-stated: currently, the automotive and heavy transport segment accounts for only 10% of the 47.7 million tonnes market for flat and long products. Around 50% is taken up by consumer goods and medical products, more likely to sustain continuing demand.
In his review of the markets for key metals in stainless steel, Mr Messer considered price drivers and inhibitors for nickel, chrome and scrap in turn.
- For nickel, LME warehouse stocks are at an all-time low and a shortfall in access to Class 1, exacerbated by restrictions on Russian trade, will drive price gains, as will strong growth in nickel battery consumption and a proposed NPI/FeNi export tax in Indonesia. On the other hand, “aggressive” expansion plans in Indonesia, an expected surplus of 115,000 tonnes this year and high stocks of finished stainless steel products could all inhibit prices.
- Drivers for chrome included rising electricity prices, low stocks of ore in Chinese warehouses and power supplies problems faced by the South African utility Eskom. Downward pressure could come from new FeCr production capacities, greater Chinese capacity and less Cr steel being used by the automotive industry as it switches to manufacturing EV models.
- The price outlook for scrap improves with less scrap generated as manufacturing growth slows and Russian exports remain limited. But low demand from the mills and low trading activity are dampening effects.
In answer to a question from the floor about the short-term future, Mr Messmer offered some hope: “I don’t expect [the stock situation] to improve for raw materials until Q1 2023. Mills started with very low purchases this year and I don’t expect any recovery in that until the end of Q1 2023 when you can expect demand to go back up again.”
The scene had been set for Mr Messmer’s presentation by the Committee’s board member Omar Al Sharif of the Sharif Metals Group in the UAE who reported on recent activity by saying that sales prices for stainless steel in Europe had fallen more rapidly than ever before amid tepid demand and record levels of imported finished goods. “Faced with plenty of finished products in stock, producers are implementing some of the lowest capacity utilisation rates ever known and are even laying off workers in some instances,” he said, quoting extracts of BIR’s recently published Stainless Steel & Special Alloys World Mirror. “Under these circumstances, both demand and prices for stainless scrap remain very low – especially as operators have expensive raw materials still in stock. As a result, many scrap sellers have looked to export scrap, including to Asia.”
Mr Al Sharif also noted that softening market conditions in the USA had prompted stainless scrap sellers to explore other markets in recent months. Latest trade statistics from the Commerce Department revealed that exports of more than 253,000 tons of stainless steel scrap in January-July 2022 was 67% up on the corresponding period in 2021.
Source: Bureau of International Recycling (BIR)