Global stainless steel scrap market faces structural shift amid nickel rally, trade barriers, and supply chain disruptions: BIR

• Indonesian nickel policies, logistics disruptions reshape stainless steel trade flows
  
  
• CBAM, US tariffs and weak downstream demand keep mills cautious on procurement
  
  

The global stainless steel scrap market remained volatile through the first half of 2026 as rising nickel prices, tightening scrap availability, geopolitical disruptions, and increasing trade protectionism continued to reshape raw material flows and stainless steel production strategies, according to the latest BIR World Mirror report on Stainless Steel & Special Alloys.

While stainless steel scrap demand remained largely stable across major regions, mills globally adopted cautious procurement strategies amid weak downstream industrial demand, volatile alloy prices, and growing uncertainty surrounding international trade policies.

Europe

According to Joost van Kleef of Oryx Stainless, Chairman of the BIR Stainless Steel & Special Alloys Committee, the European stainless steel market improved compared to last year despite profitability remaining below satisfactory levels. He noted that implementation of the EU's Carbon Border Adjustment Mechanism (CBAM) has pushed up prices across the stainless steel value chain, including ferro-chrome, ferro-nickel, and cold rolled products.

Van Kleef further observed that revised safeguard measures expected from July onwards are likely to reduce stainless steel import penetration into Europe, with imports already showing a noticeable decline during Q2CY'26. He added that stainless steel scrap demand remained solid during the quarter, although a seasonal slowdown is expected during the summer period.

Meanwhile, according to Ruggero Ricco of Nichel Leghe Spa, the European stainless steel scrap market stabilised during Q2CY'26 after a weak start to the year, supported mainly by alloy prices. Ricco noted that AISI 304 scrap prices increased to around Euro 1,200-1,300/t, while AISI 316 strengthened to Euro 2,100-2,300/t owing to stronger molybdenum values. In contrast, AISI 430 remained weak at Euro 450-550/t due to sluggish industrial demand and lack of nickel support.

Ricco also highlighted that increased imports of Indonesian NPI-based slabs and semi-finished stainless steel products continued to cap upside potential for European scrap prices, particularly for 304 grades. According to him, the European market is increasingly becoming alloy-polarised, with high-alloy grades remaining resilient while lower grades remain exposed to cyclical weakness.

Asia

According to BIR contributors Vegas Yang of HSKU Raw Material Ltd and Mahiar R. Patel of Cronimet, stainless steel scrap prices across Asia rallied following the sharp rise in LME nickel prices to nearly US $19,500/t. They observed that the nickel rally was primarily driven by Indonesian supply constraints and higher production costs caused by supply chain disruptions in the Middle East.

Yang and Patel noted that Indonesia's approved nickel production volumes reached around 210 million tonnes (mnt), with market participants closely monitoring whether authorities would permit higher production revisions during the July amendment window.

They further observed that Taiwanese mills increased stainless steel scrap purchases during Q1CY'26, while South Korean demand remained stable following scheduled furnace maintenance. Japanese mills increasingly prioritised domestic scrap usage, resulting in lower export volumes.

According to the contributors, Chinese stainless steel prices rose by nearly 15% between the beginning of the year and early May, supported by the nickel rally. However, downstream demand remained weak due to uncertainty surrounding export licensing policies and continued weakness in China's property sector.

The contributors also noted that several Indian mills showed increased interest in imported stainless steel scrap amid domestic supply shortages and disruptions affecting ferro-nickel and NPI shipments from Indonesia and the Middle East.

India

According to Ritesh Maheshwari of Shabro International Pte Ltd, the domestic stainless steel market remained resilient, with stable demand from mills despite continued volatility in raw material prices.

Maheshwari highlighted that the Indian government's temporary exemption from Quality Control Order (QCO) compliance for selected stainless flat products until 26 October has provided relief to MSMEs and downstream processors, particularly in the 200-series segment. According to him, the move is likely to support higher imports of 200-series stainless steel products and intensify competition for domestic mills.

Maheshwari further noted that domestic stainless steel scrap availability remained tight, prompting mills to increase purchases of imported scrap cargoes amid rising LME nickel prices and disruptions affecting ferro-nickel and NPI shipments.

He added that Indian mills are increasingly attempting to maximise domestic scrap sourcing owing to faster deliveries, payment flexibility, and improved quality control. However, mills continue to adopt cautious inventory-led procurement strategies owing to volatility in nickel prices and fluctuations in the Indian rupee.

Meanwhile, Shyam Metalics and Energy launched its stainless steel vertical "Tiger Stainless," with planned investments of around US$ 285 million towards specialty and stainless steel capacity expansion by 2029.

Middle East

According to Omar Al Sharif of Sharif Metals Group DMCC, the Middle East stainless steel market remained stable during Q1CY'26, although pricing dynamics increasingly became supply chain-driven rather than demand-led.

Al Sharif observed that continued Red Sea shipping disruptions extended transit routes, increased freight and insurance costs, and forced buyers across the GCC region to maintain higher inventory buffers.

He further noted that constrained European exports redirected larger volumes of Asian stainless steel material towards Middle Eastern markets, intensifying competition within regional distribution channels.

According to Al Sharif, demand from construction, oil and gas, desalination, and industrial sectors remained broadly stable, while 200-series and 300-series grades continued to dominate regional consumption. He also highlighted that the UAE retained its position as the region's primary hub for stainless steel and high-performance alloy trade, while Saudi Arabia remained the largest end-user market.

United States

According to Doug Kramer of Spectrum Alloys LLC, the US recycled stainless steel market entered Q2CY'26 on a firmer footing, supported by stronger domestic demand, higher nickel prices, and continued protectionist trade measures.

Kramer noted that Section 232 tariffs of 50% on finished and semi-finished stainless steel products significantly reduced imports and pushed domestic mill utilisation rates closer to 80%.

He further observed that increasing volumes of stainless scrap were being consumed domestically, while US stainless and ferrous scrap exports fell to multi-decade lows. India continued to remain one of the key destinations for residual US scrap exports.

According to Kramer, higher nickel prices supported alloy surcharges for 300-series grades and improved inbound values for 304 and 316 stainless scrap. However, downstream demand recovery remained uneven, particularly across consumer-oriented sectors such as food and beverage equipment manufacturing.

Superalloys

According to Rosie Hill of Ireland Alloys Ltd, the superalloy scrap market continued to witness uneven demand trends globally.

Hill noted that Inconel 718 scrap prices remained under pressure as material availability continued to outpace consumption, while mills in both the US and Europe maintained cautious purchasing strategies.

She highlighted that tungsten continued to outperform broader alloy markets despite easing from March highs above US $15/kg, supported by constrained supply, export restrictions, and increased defence-related procurement activity.

According to Hill, aerospace remained the strongest segment for superalloy consumption, supported by aircraft production programmes and recovering maintenance activity, particularly in the US and Asia. However, supply chain bottlenecks among engine OEMs continued to disrupt material flows and create uneven purchasing patterns across the market.

Outlook

Overall, the global stainless steel scrap market is increasingly transitioning towards a structurally regionalised and supply-sensitive environment, driven by Indonesian raw material dominance, protectionist trade policies, logistics disruptions, and tightening scrap availability.

While higher nickel prices and constrained scrap generation continue to support stainless steel scrap values globally, weak downstream industrial demand and cautious mill procurement strategies are expected to keep market sentiment volatile through the remainder of 2026.