Asia

Since our previous Mirror report, stainless steel scrap has rallied on nickel’s rise to peak levels of US$ 19,500 per tonne, driven by Indonesian supply constraints and by increased production costs owing to supply chain disruption in the Middle East. The nickel market is now slowly rebalancing away from a state of oversupply.  

Indonesia’s approved nickel production volumes have reached some 210 million tonnes, with approvals at 90% complete; the headline ceiling is 260 to 270 million tonnes. However, the next move depends on whether the Ministry of Energy and Mineral Resources opens the July amendment window for higher revisions. 

In the first quarter of 2026, there was an increase in Taiwanese mills’ demand for stainless steel scrap. Hot coils and nickel pig iron (NPI) remained competitive, and traditional sectors continue to show low demand. Imports of hot coil stabilised at an average of 85,000 tonnes per month between January and March. Taiwan’s stainless scrap demand is expected to pick up in the next quarter.

Meanwhile, South Korea’s stainless steel scrap demand was stable in the first quarter. Production has returned to normal after scheduled furnace maintenance. Japan’s consumption of stainless scrap remains steady while its exports have dropped to low levels compared to previous years as local mills increasingly use domestic supplies. This trend is expected to continue for the next few months.

Chinese stainless prices have appreciated by around 15% between the start of the year and early May, driven by the LME nickel rally. Despite stainless steel mills raising prices, the market has remained thin as uncertainty around new export licensing policies takes effect and the real estate sector shows a 15.9% decline in investment.

With LME nickel moving upwards, several mills in India have shown interest in buying imported scrap at higher levels than domestic material. This is partly because supply of domestic scrap has declined substantially and therefore mills have been left with no option but to import. Furthermore, ferro-nickel and NPI have experienced some logistics issues owing to the conflict in the Middle East, leading to container availability disruption. Scrap supplies from the UAE and neighbouring countries have also been hampered by the conflict. In recent months too, scrap shipments from Indonesia have decreased as the government has reduced the issuance of export licences. The situation in the Middle East has also led to a spike in oil prices and thus to a substantial increase in manufacturing costs; in some areas, plants have had to reduce production owing to electricity shortages.

Indian stainless mills’ sales of finished goods have recovered only in the last month or so following a first quarter in which order books were very poor. Uncertainty surrounding US tariffs, the EU’s Carbon Border Adjustment Mechanism and quotas prompted mills to adopt a cautious approach and to perform below their peak.

May is looking positive for now but prospects will depend to a significant degree on an end to the Middle East crisis and a return to earlier times of stability.