Weak demand and nickel volatility weigh on European stainless scrap prices

European stainless steel scrap prices declined in July as weakening stainless steel demand coincided with increased volatility in the global nickel market, according to the latest market analysis by MEPS International.

Scrap traders in France, Germany, Italy and the Netherlands reported a sharp fall in prices during the second half of June and throughout July. Buyers indicated that prices for grade 304 stainless scrap dropped by as much as €110 per tonne compared with the previous month, although values remain above 2025 levels.

Italian market under pressure

The steepest declines were reported in Italy, where some traders purchased grade 304 scrap for as little as €1,150 per tonne. Weak domestic demand and high inventory levels prompted several processors to suspend scrap collections ahead of the summer holiday period.

According to Italian industry association Assofermet, the slowdown in domestic procurement has encouraged stainless scrap traders to increase exports to India.

Nickel prices add further pressure

The decline in scrap prices was reinforced by falling nickel prices following market speculation that Indonesia could ease restrictions on nickel ore mining quotas.

The London Metal Exchange (LME) cash nickel price fell by more than 16% between early June and early July, dropping from USD 19,165 to USD 16,060 per tonne. Although Indonesian authorities later denied reports of a broad increase in mining quotas, the earlier speculation unsettled the market.

Nickel prices have since recovered to around USD 17,200 per tonne, but MEPS expects weak stainless steel demand to continue limiting any recovery in European scrap prices.

Summer shutdowns and import competition

European stainless steel producers are also reducing output during the traditional summer maintenance period to better align production with subdued demand.

At the same time, mills continue to face competition from imported feedstock. According to MEPS, some producers are still using Indonesian stainless steel slabs instead of domestic scrap because they remain a cost-effective raw material despite CBAM-related costs.

Market participants also reported that around 50,000 tonnes of Indonesian slab arrived at Southern European ports during June, adding further supply to an already weak market.

Source: MEPS, Photo: Fotolia