Nickel prices should recover to around $10,000/tonne by the end of 2017, while crude stainless steel production will grow 4.8% on-year this year to 49.2 million tonnes, according to Markus Moll of Austria-based Steel & Metals Market Research.

Chinese crude stainless output is seen following its 10.7% growth in 2016 with a 5% increase in 2017 to 26.27mt. Stainless steel demand is performing well in many end-use areas, notably automotive and appliances, Moll told delegates at the recent Bureau of International Recycling (BIR) summit in Hong Kong.

Intercontinental stainless scrap trading accounted for only 8% of the market in 2016, suggesting this was “…increasingly a regional business,” Moll said. The substitution of 300 series stainless appears to be stalling or even reversing, with its share in global stainless output seen up to 55.2% in 2021 from 54.1% in 2016. The share of the 200 series, on the other hand, is seen falling to 18.7% from 20.8% over the same period.

Freelance journalist Adam Minter, meanwhile, said the trend is away from mono-polar scrap trading – when material generally flowed from the developed to the developing world – towards “multi-polar” trading between everybody. This shift “…will be a challenge for established players” and could entail “…tighter margins” and “…tougher business,” according to a BIR note seen by Kallanish.

With China’s futures exchanges set to allow non-resident entities to hedge and trade, Minter anticipates a trading migration from the London Metal Exchange to the Shanghai Futures Exchange.