- Indian buyers prefer domestic scrap, semis
- Oversupply persists in Chinese stainless steel market
The May 2025 issue of the BIR World Mirror on Stainless Steel & Special Alloys highlights how early signs of market recovery were abruptly disrupted by new US tariffs, reigniting global uncertainty and dampening demand. While some regions initially saw improved order intakes and production activity, the widespread impact of trade tensions, supply imbalances, and rising costs has led to price declines, tighter margins, and cautious market sentiment.
The report offers a concise overview of global developments, including regional demand shifts, scrap availability trends, and continued volatility in the nickel market.
European market
The stainless steel market saw early signs of recovery in 2025, with improved PMIs and rising order intakes across parts of Europe. However, new US tariffs disrupted this momentum, triggering uncertainty, falling demand, and declining prices for stainless steel and raw materials like stainless scrap. Financial results from key European producers show shrinking margins amid ongoing challenges. With the summer slowdown approaching, a market rebound seems unlikely, making 2025 a difficult year for the stainless steel industry.
Asian market
Asia’s stainless steel market has remained weak since February. The tariff war has caused currency fluctuations and low demand prevails, creating a difficult environment for stainless scrap and end products.
Taiwanese mills showed weak demand in Q1 2025, with hot coils and NPI remaining competitive. South Korea’s demand was stable but expected to dip due to furnace maintenance. Japan’s exports declined as domestic use rose. China’s slight March recovery faded; oversupply persists despite housing stabilisation.
In Malaysia and Indonesia, scrap supply has tightened due to reduced production. In India, demand for imported scrap dropped sharply amid uncertainty, tighter margins, and competition from other raw materials. Domestic scrap is preferred due to cost and credit terms. Port activity is impacted by India-Pakistan tensions. Experts anticipate a possible demand rebound in the second half of 2025 if tariffs are resolved.
Indian market
India’s stainless steel finished product output reached 3.7 mnt in the last financial year, marking a 13% increase over April 2023–March 2024. However, stainless steel scrap imports declined by 1-2% to 1.31 mnt due to increased sourcing of competitively priced semi-finished products like billets (up 55% to 110,000 t), ferro-nickel (200,000 t), and slabs (400,000 t). Imports of 300 series scrap dropped 4% y-o-y, with 304 and 316 grades down 6% and 19%, respectively, while Zurik rose 4%.
Domestic scrap availability is improving, with prices often lower than imports. Given forex volatility, longer lead times, and a fluctuating LME, mills prefer domestic scrap with credit terms. Going forward, semi-finished imports are expected to continue impacting scrap demand. Mills remain cautious on inventory levels and will align imports with confirmed orders due to ongoing global uncertainties.
Italy
The stainless steel market has been in decline for over six months, with falling prices and sales volumes. Hopes for a rebound under the new US President have not materialised, as global conflicts remain unresolved and India-Pakistan tensions have intensified.
US tariffs have further destabilised the market, leaving Asian producers scrambling to reallocate output–impacting Europe directly. European mills now face a choice between continuing with scrap-based production or switching to nickel pig iron or imported slabs. Weak domestic demand has sparked aggressive price competition, favouring lower-cost Indonesian products.
Once price parity with nickel pig iron was reached, Indonesian suppliers lowered prices further, challenging Europe’s more sustainable production models. Amid geopolitical uncertainty, ongoing tariffs, and subdued European demand, prices continue to fall. Currently, there are no clear signs of a near-term recovery in the stainless steel sector.
Middle East
The Middle East stainless steel market is set for strong growth in 2025, driven by robust demand across construction, infrastructure, and automotive sectors. Prices are rising due to global raw material inflation, supply chain disruptions, high energy costs, and freight challenges.
Nickel prices are expected to stay high, while chromium may ease slightly, impacting alloy surcharges. Regulatory changes and geopolitical instability are reshaping trade flows and adding volatility. Despite elevated prices, demand remains strong—fuelled by mega-projects like Saudi Arabia’s NEOM, UAE Expo legacy initiatives, and Vision 2030.
The region’s industrial expansion and economic diversification efforts are also boosting stainless steel usage. Dubai and other Gulf markets have seen sharp price increases amid tight supply. Industry players are advised to track global trends, diversify suppliers, and plan early procurement to manage volatility. Overall, steady market growth is expected in the region despite global headwinds.
Superalloys market update
Nickel prices were highly volatile from February to April 2025. After briefly peaking at $16,720/t in March, prices dropped sharply to $14,150/t in early April–a 15.4% fall–due to macroeconomic concerns and aggressive US tariffs.
Prices later rebounded to around $15,600/t following easing trade tensions. Indonesia remains the top nickel supplier, but reduced ore export quotas forced smelters to import more from the Philippines, where new royalty hikes (14–19%) raised costs and sparked investor concerns.
Meanwhile, US tariffs on Chinese goods triggered a steep 11.5% price drop, weakening China’s demand outlook and shaking global trade confidence. Although China’s stainless steel output rose, weak demand in real estate and appliances, plus EU trade barriers, curbed growth. In batteries, a shift to LFP chemistries led to a 19% drop in NMC battery demand and reduced nickel’s market share to 11.5%. Oversupply, trade volatility, and macroeconomic uncertainty are expected to keep nickel prices under pressure.
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