The slower summer season across many of the stainless-producing regions of the world has seen a degree of stabilization in scrap markets as of writing, with LME nickel prices trading more-or-less sideways since late June. Nevertheless, continued falls in the early parts of last month mean that average scrap prices for delivery in July have fallen again. The falls in prices have been rather substantial as well, with scrap merchants competing for declining levels of business as a number of stainless mills have switched to reduced operating hours over July and August. The falls this month have also made up for the relatively smaller falls in recent months and the upshot is that scrap has now become much more competitive relative to primary raw materials. This is perhaps good timing for scrap merchants given that we expect stainless mills to begin restocking raw materials soon and so perhaps this will help to boost prices as Q> approaches.
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