United States

The US stainless steel scrap market continues to be impacted by volatile raw material input prices, including recently weaker nickel prices. On the LME, three-month nickel dropped from around US$ 20,000 per tonne in early September to some US$ 18,000 in early October. However, stainless steel markets continue to benefit from elevated carbon steel and other metal prices, improved US steel mill capacity utilization rates and positive manufacturing growth.

According to the American Iron and Steel Institute, the US steel mill capacity utilization rate was up around 85% in early October from just 69% one year ago. Meanwhile, the Institute for Supply Management reports that its US Manufacturing Purchasing Managers’ Index improved from 59.9 in August to 61.1 in September amid strong domestic demand and the sixteenth consecutive month of US economic expansion since April last year.

However, US companies are continuing to struggle with raw material shortages, transportation bottlenecks and difficulties in hiring new employees. As one market participant recently put it: “We are still amazed by the labour market. We used to have 100 applicants for an opening; we are now seeing about 10 - and often, the applicant does not show for the interview.”

While port conditions on the US West Coast remain extremely challenging, overseas demand for stainless steel scrap has begun to show some signs of improvement in recent months on higher demand from Mexico, India and Canada. Looking ahead, industry consolidation in the USA is expected to be a recurring theme amid new steel mill plans to vertically integrate while the larger scrap recycling companies continue to expand their footprints.