India: Stainless steel scrap prices surge on supply crunch, nickel rally

• Imported scrap trade hit by supply, regulatory hurdles
  
  
• Nickel surge intensifies cost pressure on producers
  
  

India's stainless steel scrap market strengthened in the week ended 1 May, driven by a widening demand-supply mismatch and a sharp rally in global nickel prices. Firm mill demand alongside constrained scrap availability pushed prices higher across key grades, reinforcing bullish sentiment in the domestic market.

Supply shortage lifts domestic prices

Scrap availability remained limited across major hubs, even as mills stepped up procurement. Domestic 304-grade scrap prices rose by INR 2,000/t w-o-w to INR 138,000/t DAP Delhi, while 316 scrap surged by INR 7,000/t to INR 257,000/t. Utensil scrap prices held steady at INR 71,000/t.

Imported market sees limited activity

Imported scrap bookings remained limited due to tight availability and unworkable price levels. Offers for 304 scrap increased to $1,500-1,520/t CFR, while buyer bids lagged at $1,450-1,470/t, creating a significant bid-offer gap. Suppliers diverted cargoes to more competitive markets offering better realisations, further restricting supply to India.

Market participants highlighted persistent supply constraints. A trader said difficulties in sourcing imported material due to regulatory restrictions in Vietnam, including delays in PSIC approvals and additional customs costs of INR 30,000-35,000 per container disrupted trade flows. Another trader added that rising demand amid tight availability continues to support higher prices, while buyers confirmed limited domestic scrap supply.

BigMint's import assessments reflected firm trends, with 304 scrap at $1,500/t (+$50/t w-o-w) and 316 scrap at $2,800/t (+$30/t w-o-w), while 201 and 430 grades remained stable at $730/t and $660/t, respectively.

Nickel rally drives sentiment

LME three-month nickel prices climbed to around $19,475/t on 30 April, marking a two-year high and rising 5% m-o-m in April. The rally was driven by Indonesian mining disruptions, rising input costs, and improved demand from China's stainless steel and new energy sectors. Despite relatively high global inventories, elevated nickel prices have increased cost pressure across the value chain, supporting scrap price gains.

Outlook

The stainless scrap market is expected to remain firm in the near term, supported by tight supply and elevated nickel prices. However, continued volatility in nickel and cautious buying at higher price levels may cap sharp price increases.