Skip to main content


Regarding North Asia’s stainless steel demand, the final quarter of 2022 began with slow intakes by both mills and factories. Entering the first quarter of 2023 with COVID restrictions removed in China, the mood has become gradually more upbeat and demand is slowly starting to improve.

Taiwanese mills’ demand for stainless steel scrap was good in the fourth quarter of 2022 owing to the closure of Posco’s major stainless mill in South Korea for typhoon-related repairs. In early 2023, Taiwanese demand has maintained its momentum but Indonesian hot coil imports have begun to increase, once again creating a see-saw between stainless scrap and these hot coils.

Melt shop operations at the Posco mill in South Korea were halted in the fourth quarter of last year owing to flooding. At the time of writing on February 8, two of the three furnaces have been restarted; however, there has been a limited impact on the overall market as considerable volumes of South Korea’s domestic scrap had been stocked up for Posco. So while the return to operations of this major stainless scrap smelter is good news, it may not be until the second quarter that the market returns to normal.

In China, stainless scrap demand is extremely healthy owing to its continuing price advantage over nickel pig iron. In Shanghai, 304 grade stainless coil futures are still trading in the range of RMB$ 16,500 to 17,500 per tonne. Some mills have started to experiment with imports of stainless scrap from the international market. However, the country’s Green Fence environmental laws require such scrap to have less than 0.3% impurities, such that only the bravest suppliers and buyers are daring to try their luck. If impurities are judged to exceed 0.3% according to visual inspection and the mood of the customs officer on the day, the cargo is returned to the original port of loading.

Japan’s demand for stainless scrap has been weak since the fourth quarter of 2022. A surplus on the domestic market, as well as scrap that would have headed in the past to Posco in South Korea, has been flowing into Taiwan, as well as into China and India.

In India, the mood has been rather different. The 15% export duty on stainless finished products was finally removed after several months of hard lobbying of the government by industry representatives. However, this has not translated into the anticipated increase in stainless scrap imports.

Scrap prices in India have been lagging behind those prevailing in the USA and Europe. As a result, long-haul movements of scrap from the USA and Europe have fallen substantially compared to the previous two to three months. Imports of 200 and 400 series scrap have dropped in recent months as mills have been able to find cheaper scrap in India at a time of average order books for their finished products.

On a positive note, the substantial correction in container freight rates worldwide is encouraging scrap to move more freely over longer distances.

Indian mills have decent order books for the next two months or so but are not very bullish, and so scrap prices are continuing to lag behind. Even imports of substitutes such as ferro-nickel have been rather slow as mills want to buy at huge discounts to the LME. The last few months have also seen steady imports of slabs and semis into India, thereby reducing scrap import needs still further.

This year could bring some swings in LME nickel as well as in the supply/demand patterns of the mills, making stainless scrap trading a little more difficult.