India: Stainless steel scrap market remains firm amid West Asia tensions, cost pressures rise

• Logistics constraints support scrap prices
• Energy disruptions tighten operating environment for mills

India’s stainless steel scrap market remained firm in the week ended 20 March, supported by tightening supply conditions and rising logistics costs linked to geopolitical tensions in West Asia. Disruptions in the supply of key industrial gases such as LPG and LNG, amid ongoing tensions in the Persian Gulf, have increased operating challenges for stainless steel producers, adding pressure on production economics.

Industry participants noted that the sector, being highly energy-intensive and dependent on global raw material flows, is vulnerable to fluctuations in energy and freight costs. Export activity to the Middle East has also been impacted, while some domestic mills reported operational disruptions due to constrained gas availability.

Supply disruptions tighten domestic availability

With nearly 60% of India’s LPG demand met through imports—and around 90% routed via the Strait of Hormuz—ongoing tensions have heightened supply risks. This has resulted in intermittent shortages of industrial gases, disrupting operations at key facilities and constraining scrap generation and processing activity.

At the same time, rising freight rates, vessel constraints, and war-related surcharges have restricted import flows, prompting mills to increasingly rely on domestic scrap procurement.

LME nickel prices edge down w-o-w

On the cost side, benchmark three-month contract nickel prices on the London Metal Exchange (LME) closed at $16,475/t on 20 March ,down 7% from $17,725/t in the previous week. LME-registered nickel stocks stood at 283,770 t from last week’s 285,684 t, slightly higher w-o-w.

BigMint’s scrap assessments

Nearshore-origin SS 304 scrap (loose): $1,380/t, stable w-o-w.

Nearshore-origin SS 316 scrap (loose): $2,680/t, stable w-o-w.

Nearshore-origin SS 201 scrap (loose): $710/t, up $5/t w-o-w.

Nearshore-origin SS 430 scrap (loose): $630/t, stable w-o-w.

SS 304 scrap, DAP Delhi: INR 120,000/t, stable w-o-w.

SS 316 scrap, DAP Delhi: INR 225,000/t, steady w-o-w.

SS utensil scrap, DAP Delhi: INR 69,000/t, steady w-o-w.

Outlook

The market is expected to remain firm, supported by supply-side constraints and elevated logistics costs. However, softer nickel prices may cap sharp upside, while continued geopolitical uncertainty will remain a key driver of sentiment.