FOCUS: Chinese stainless steel mills increase scrap usage amid high prices for ferro-alloys

Chinese stainless steel producers have increased their consumption of stainless steel scrap in the last two months in an attempt to reduce their input costs, particularly those for ferro-alloys, with nickel prices soaring since mid-July, sources told Fastmarkets.

Chinese stainless steel producers typically use a combination of nickel pig iron (NPI), stainless scrap and ferro-alloys for production.
The ferro-alloys consumed mainly consist of ferro-nickel, ferro-chrome and ferro-manganese, and the ratio differs depending on whether they are used to produce 200-series, 300-series or 400-series stainless steel.
Prices for nickel-related raw materials have increased significantly in the past couple of months while those for ferro-chrome experienced a slight uptick, which fueled the strengthening of the stainless steel market over 10 weeks until early September.
Amid an ongoing push among many stainless steelmakers to produce at full capacity, costlier raw materials have led them to readjust their strategies and make trade-offs to lower their costs.
This led many mills to increase their consumption of stainless steel scrap, which reduces that of NPI and ferro-chrome, Fastmarkets is made to understand.

“The average scrap consumption rate among Chinese stainless steel producers is typically...

Published

Sally Zhang

Siyi Liu

September 23, 2020

06:50 GMT

Shanghai