Nickel Based Scrap Supply Maintains Short in Japan

Nickel based scrap supply is shortening in Japan. Scrap generation is not abundant to catch up with production recovery at domestic stainless steel and special steel makers. The makers cannot secure enough volume of scrap even from overseas when scrap generation also keeps low in USA.

Operating rate of Japanese stainless steel and special steel makers’ plants has recovered to around 80% thanks to the export increase. Along the high operations, the makers’ demand is increasing for stainless steel scrap and high grade nickel based scrap.

The demand has recovered for nickel based alloy scrap containing nickel at above 30% or pure nickel scrap in a recent half year. A scrap dealer around Tokyo said steel makers’ demand volume is almost as much as the peak level.

Meanwhile, scrap generation keeps inactive in Japanese market. For example, generation of nickel alloy leadframe scrap maintains low despite of the favorable demand for leadframe products. Scrap generation is also low from punching factories.

Japanese major scrap dealer points out nickel based scrap generation keeps weak in USA as well. The source heard from US shipper that turning scrap generation is low from US special steel makers and, as a result, the premium is surging when scrap supply is short from US market.

It is unforeseeable whether stainless steel and special steel demand keeps steady in and after April. However, domestic scrap dealers hold few inventories of nickel based scrap and the supply would maintain short against the demand for a while.