During the Stainless Steel & Special Alloys Committee meeting on 28 October, chaired by Joost van Kleef of Oryx Stainless BV (NLD), topics included the shift from globalisation to regionalisation, restrictions, tariffs and changing trade flows.
The opening ‘BIR World Mirror’ summary report, given by Vegas Yang, CEO, HSKU Raw Material Ltd (TWN), revealed that the market in China continues to be weak following the tariff war, while US tariffs are one of the challenges facing the growing market in India.
But in the US, the stainless market was described as “healthy”, supported by the 50% import tariff, with information showing domestic melt rates above 80% capacity. Local mills in the US are reported to be profitable due to stable consumption and less competition from imports. The special alloys sector, meanwhile, has a 10-year future order book from the aerospace and industrial sectors.
Asked whether trade would become more, or less, restrictive, Emily Sanchez, Chief Economist, ReMA (USA) and General Delegate on the Stainless Steel & Special Alloys board, said: “In the medium term, at least, I don’t see how it can’t be an environment that becomes more restrictive, before we have a situation where we can return to rationalisation.”
With export licence requirements, bans and preference schemes for domestic processors all in the mix, Ms Sanchez said the current situation was a “challenge”. “Policymakers involved in putting these kinds of policies forth don’t yet have an understanding of how the market for recycled materials is fundamentally different from the market for primary materials,” she said, “and that impacts what they expect to get out of their stated objectives when it comes to these policies”.
There was “still a lot of uncertainty” and global trade, recycled stainless, and other secondary materials faced “increasing pressure from competing forces”. Ms Sanchez added: “On one hand, you’ll continue to have this global push towards decarbonisation, meeting Circular Economy goals. These, logically, should favour more open trade for recycled stainless. On the other hand, we also have this troubling trend towards increased resource nationalisation. In the US, for example, [the country is] seeing raw materials, increasingly, as a strategic national resource, something that needs to be retained within the economy, rather than seeing it as a commodity that should be traded openly.”
Her biggest concern with trade restrictions on recycled materials was that they “tend to trigger retaliatory measures in other countries” which can create a “race to the bottom” and fragmented markets “that are not really serving anyone”. “The real risk involved is that these types of measures can become entrenched and, once entrenched, it’s really hard to reverse.”
Mahiar Patel, Managing Director, Cronimet (SGP), which has stainless processing plants in the US, said his company had not seen the ‘Trump effect’ taking place “as fast as it should have”. “Everybody was still in a bit of a dilemma as to how these policies will implement and directly benefit the stainless processors like ourselves and several others,” he added.
Mr Patel said there could be production delays in the short term, because increasing capacity took time. But America would benefit more than the rest of the world on an immediate basis. “By default, we will see less stainless [scrap] being exported from the US. And, of course, the incentive schemes are pretty attractive. So, in the coming years, or the immediate one or two years, you will see some effect. So, the other countries in the Far East, which import a lot of that American scrap, will miss out on that scrap.”
Dhruv Goel, founder and CEO of BigMint (IND), who gave a presentation on India’s growing and evolving stainless steel industry, added that, in terms of the shift from globalisation to regionalisation, India was not lagging behind. Measures are being discussed and implemented by the Indian government, he said, “to make sure that the domestic production of stainless steel remains intact”.
India, which is the largest importer of recovered stainless steel, is aware of the impact of reductions in supply and the need to find alternatives. “We feel that the usage of NPI [nickel pig iron] will increase,” he explained. “I’m sure you must be aware that Jindal, which is the largest stainless-steel producer in India, has invested in a NPI plant in Indonesia. Their aim is, that they will feed more NPI in years to come. Imported stainless steel scrap will remain very important for the Indian market but there will be limitations. Many countries would like to contain or restrict the outflow of stainless steel scrap, so new companies have to look for alternatives.”
According to Mr Goel, the compound annual growth rate for stainless steel scrap is 8.6% but the rate of growth for NPI and other alloy elements is growing even faster. “Local generation of stainless scrap in India is very limited, and [it is] unlikely that it will increase significantly in coming years,” he said.
Stainless steel consumption in India is set to increase from 3kg per capita to 5.6-5.8kg by 2030, with rapidly increasing demand from the building, construction and transport sectors.
In Europe, it was noted that the carbon border adjustment mechanism is due to be implemented in January 2026. Mr Yang said: “The objective of the carbon border adjustment mechanism (CBAM) is to reduce carbon emissions, putting a price on carbon emitted during the production of carbon intensive goods imported into the EU and to encourage cleaner industrial production. In principle, CBAM is good news for Europe’s scrap industry, and also, if it really takes off, should be good for the environment around the world. But of course, as with many new regulatory developments, its introduction brings uncertainty and increased bureaucracy.”
