United States

Market conditions for US recyclers of stainless steel and specialty alloys continue to change significantly from week to week. Some of the major sources of concern include uncertainty regarding the upcoming US election and future interest rate changes, which will both have significant implications for business investment. The Federal Reserve’s half-point rate cut in September, along with China’s plans to inject more monetary stimulus, have been seen as supportive of market sentiment and commodity prices.

However, the US economy continues to have a two-speed trajectory, with the service sector exhibiting much healthier growth than the manufacturing sector. The Institute for Supply Management reports that economic activity in the US manufacturing sector contracted in August for the fifth consecutive month and for the 21st time in the last 22 months. And while the US economy added 142,000 jobs in August, the manufacturing sector actually lost 24,000 jobs. Even as the US labour market is beginning to soften, recyclers continue to struggle to find and retain new workers.

A further complication at the start of this month was the dockworker strike affecting East Coast and Gulf Coast ports. More than half of all the recycled materials exported from the USA are shipped from these two regions. However, at the time of writing, a tentative deal has been reached.

As for overseas demand for recycled stainless steel, India remains the largest export destination despite slower shipments this year. In the first seven months of 2024, US exports of recycled stainless steel fell 30% to 212,000 tonnes, with India accounting for 45% of the total. Weaker demand for recycled stainless steel in Mexico and Taiwan also contributed to the decline.

In contrast, US trade data show stainless steel scrap exports to the Netherlands and Canada rose sharply during the first seven months of the year, supporting reports earlier in the year that recycled stainless steel was relatively tight in North America and Europe, but again those regional market conditions have been changing quickly. Market participants also continue to express concerns about low-priced material from China and Indonesia displacing demand for US recycled metal in key market segments.