Q4 can be challenging for the stainless steel sector

Global notes that "The fourth quarter will be challenging for all those active in stainless steel recycling." Higher commodity prices have improved the availability of stainless scrap in recent months, but a possible decline in nickel prices "will have a negative effect on the volume and profitability of both products."

The higher nickel values ​​are due to the uncertainty in the Philippines' mining policy and its impact on the country's nickel production. But the country's economy relies heavily on revenues from nickel ore exports, and lacks the funds or infrastructure to support its own nickel processing. This fact suggests that nickel prices will sooner or later receive a retreat from these higher levels.

EU stainless steel production fell 2.5% in the first six months of 2016 compared to the same period last year. Nickel is a dollar-denominated commodity, so its strengthening has raised domestic prices for stainless steel scrap.

Export duties imposed by Russia may be lowered this month in accordance with the agreement of the World Trade Organization. The duty applied to stainless steel scrap is expected to drop to 5% from 7.5% - a move that will be "favorable" for scrap exporters, which explains why "there weren't that many shipments in August." ...