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Slower manufacturing output, commodity price volatility and rising interest rates are some of the major obstacles continuing to confront recyclers in the USA. The latest PMI reading of 46.0 for June indicates a continued contraction in US manufacturing output. According to market participants, new orders for manufactured goods are now getting pushed back into 2024 while hiring and retaining workers remain a major struggle.

For US steel mills, the American Iron and Steel Institute reports the capacity utilization rate has been hovering around 78% of late, down from more than 80% this time last year. Meanwhile, steel sheet and recycled steel prices have been pressured into heading lower over recent months.

Falling nickel prices have also been an issue, with LME nickel plunging 34% in the first half of 2023. For stainless steel recyclers in the USA, material prices have generally followed nickel lower. The Davis Index reports that most of the major grades of recycled stainless steel in the USA were trending down to sideways at the start of July.

Despite lacklustre stainless steel market conditions in many domestic regions, international trade flows of recycled stainless steel started the year on a positive note. According to US Commerce Department data, exports during the January-April 2023 period increased 69% year on year to 130,000 tonnes thanks to improved demand from India, Mexico and Taiwan among others.

However, clouds on the trading horizon loom large for exporters of recycled nickel, nickel alloys and stainless steel. In addition to other trade restrictions, parties to the Basel Convention - which establishes protocols on transboundary movements of hazardous and other “wastes” - are reportedly considering amendments to Annex I, to include the addition of nickel and nickel compounds. This is a major concern for recyclers of stainless steel and related alloys.

Meanwhile, worldstainless is projecting flat growth in global stainless steel consumption this year, followed by a 3.6% gain in 2024. In the Americas, worldstainless sees stainless steel consumption declining 4.1% this year.