- Japan stainless scrap prices decline after prolonged rally
- Indonesia RKAB expectations ease global nickel supply concerns
Japan’s nickel-bearing stainless steel scrap market came under pressure this week, with prices softening in the Kanto region following a sharp correction in London Metal Exchange (LME) nickel prices. Major exporters reduced their stainless steel scrap purchase prices by JPY 5,000/t effective 8 July, while domestic mills also started lowering procurement prices, signalling the first market correction in nearly seven-and-a-half months.
The recent decline follows a prolonged rally that began late last year, supported by higher LME nickel prices and concerns over Indonesia’s nickel ore supply. However, sentiment weakened after Indonesia began accepting applications for additional RKAB (mining quota) allocations in July, easing fears of ore shortages and dragging LME nickel prices down from around $8.8/lb in early May to nearly $7.3/lb.
Despite the price correction, scrap availability in the Kanto region remains limited. Market participants noted that stainless steel production levels remain subdued, resulting in low scrap generation. As a result, regional supply-demand conditions remain largely balanced, preventing any significant oversupply in the domestic market.
Market participants expect the Japanese stainless steel scrap market to remain cautious in the near term, with LME nickel price movements and Indonesia’s mining policy continuing to dictate market direction. Limited scrap generation, however, is expected to provide some support against a sharper decline in domestic scrap prices.
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