Skip to main content

United States

Stainless steel recyclers in the USA have been faced with a number of challenges, including declining domestic stainless steel production, falling nickel prices, sluggish manufacturing output, elevated interest rates, increased regulatory oversight and rising transportation costs. According to latest figures from worldstainless (formerly the International Stainless Steel Forum), US stainless steel melt shop production fell 12.9% year on year in the first nine months of 2023 to 1.38 million tonnes. The decline in US stainless production coincides with slumping manufacturing output more broadly.

According to the Institute for Supply Management, the US manufacturing PMI came in at 49.1 in January, marking the 15th consecutive month of contraction. Although the US economy overall continues to beat expectations in terms of GDP and job gains, the better-than-expected growth has largely come from the services sector and not from manufacturing. In addition, labour market tightness continues to make it difficult for recyclers to hire and retain new talent.

At the same time, nickel prices have been trending lower since the beginning of 2023 - from around US$ 30,000 per tonne on the LME to current levels around US$ 16,000. Further complicating matters has been recent increases in transportation costs: FreightWaves reports that US trucking spot rates have increased 15% since November; over the same period, notes Drewry Shipping Consultants, the average cost of shipping a 40-ft container has surged 2.7-fold as lines look to pass on elevated costs generated by disruption in the Red Sea and elsewhere through higher rates and surcharges.

A couple of bright spots have helped to mitigate the generally challenging business environment for stainless steel recyclers in the USA. Reduced winter collection volumes combined with healthy overseas scrap demand have helped to underpin prices. The USA exported more than 478,000 tonnes of stainless steel scrap in the first 11 months of 2023, up 28% on the corresponding period in 2022. India continues to be the largest overseas buyer of US stainless steel scrap, with shipments up 31% in January-November 2023 to more than 178,000 tonnes. 

Looking forward, the Federal Reserve is expected to begin lowering interest rates in 2024, which should start to reduce borrowing costs and boost investment spending.