Stainless steel markets worldwide started 2025 “cautiously” with a “huge capacity overhang” in Asia, the Brussels-based Bureau of International Recycling said in a quarterly bulletin Feb. 14.
The US plans to levy a 25% tariff on steel and aluminum starting March 12, opening “a fresh chapter in the global trend towards protectionism,” said Joost van Kleef, commercial director of the Netherlands’ Oryx Stainless, and chairman of BIR’s stainless steel & special alloys committee.
“This will hit stainless producers with a globalized value chain and which need to import semi-finished products for further treatment in their US-based facilities,” van Kleef said.
In Europe, leading stainless producers’ profitability is constrained, van Kleef continued, citing weak EU demand and Asia’s capacity overhang as impeding any sales price increase on finished goods.
“Still, order intakes have increased slightly during the early weeks of the year. The coming elections in Germany should give some support in overcoming the uncertainty created by an absence of direction in government policy,” van Kleef said.
Continuing imports of nickel pig iron are undermining the industry’s efforts towards a circular economy, the BIR chairman said. Nonetheless, the Philippines’ recent announcement of restrictions or a ban on nickel ore exports might increase the NPI price, encouraging stainless scrap demand, he added.
Underlying China concerns
Vegas Yang of Taiwan’s HSKU Raw Material Ltd and Mahiar R. Patel of Singapore’s Cronimet, both processors and traders of stainless scrap, wrote in an article in the bulletin that neither of China’s two recent rounds of stimulus packages has revived its economy.
“China is continuing to overproduce and to flood the Asian market with stainless steel end products,” Yang and Patel said.
“For 2025, the agenda to be followed by the new Trump administration could mean we see the USA pick up first before any possibility of a return to healthy demand for Asia,” they said. “China’s stainless steel manufacturers are looking around for markets other than the USA.”
Despite China’s continuing weak markets “amid a housing collapse, there have been no major cuts in stainless output as most mills try to produce and sell more in the hope that volume will make up for small profit margins,” according to the traders. “This is intensifying problems not only for China but also for other countries as material floods the markets and impacts overseas producers.”
Stainless steel coil pricing in China remains rangebound, with 304 grade futures in Shanghai at around $13,000/mt, they said.
They noted that in Q4 2024, Taiwanese mills’ demand for stainless steel scrap began to weaken due to competition from NPI. In January, these imports, albeit competitively priced, were lower than in the previous quarter.
“South Korea’s stainless steel scrap demand was stable in Q4 but will be very weak in Q1 owing to furnace maintenance,” Yang and Patel said. “Japan’s domestic demand for stainless scrap was steady late last year and exports have declined rapidly as its mills consume more domestic scrap; the same trend seems to be continuing in the early weeks of 2025.”
Yang and Patel wrote that “huge” volumes of nickel pig iron, ferronickel, and semis such as slabs, blooms, and billets are being imported into India on a monthly basis, reducing the requirement for stainless scrap imports, a trend that has been growing year on year.
“Zurik imports into India have remained steady; once sorted, the stainless scrap is offered to mills at a discount, much of it on credit terms so that it is more attractive than stainless steel scrap imports,” they added.
Since mid-January, several currencies including the Indian rupee have taken a hit, making it more expensive for India’s importers to pay for scrap booked several months ago and now arriving at Indian ports.
LME nickel has dropped significantly in the past month, thus negatively impacting the buying of stainless steel scrap. Container freight rates have also come down for most locations and this should help scrap movements, according to the traders.
Despite global trade uncertainties, markets are nonetheless expected to pick up in late February and March this year amid reports that nickel has bottomed out and can be expected to recover soon, Yang and Patel concluded.
“Overall, we feel that markets will move upwards and demand should return by the end of Q1,” the traders wrote.
