According to the Bureau of International Recycling (BIR), demand for stainless steel scrap in Europe has remained relatively stable, though achievable price levels continue to face downward pressure due to sustained imports of nickel pig iron and stainless steel slabs.
European stainless steel demand showed a modest improvement in February this year. However, the implementation of the EU’s Carbon Border Adjustment Mechanism (CBAM) has introduced additional uncertainty into the regional supply-demand balance. Over the longer term, CBAM is expected to provide structural support by limiting competitive pressure from higher-carbon imports and strengthening the position of domestic producers.
Weak downstream demand weighs on Italian market
Market feedback from Italy indicates that operating conditions remain challenging across the stainless steel sector. End-user demand continues to lag, particularly in the automotive and household appliance industries, while elevated inventory levels across the supply chain are keeping prices under pressure.
At the same time, persistently high energy and raw material costs are compressing producer margins. Scrap collection and trading activity have mirrored subdued industrial production and weak downstream consumption.
Asian stainless scrap markets react to nickel price volatility
In Asia, stainless scrap markets recorded a strong rally following a sharp increase in London Metal Exchange nickel prices, which rose from around $14,000/mt in mid-December to nearly $19,000/mt by late January before easing.
Taiwanese stainless producers reported weak scrap demand during the fourth quarter of last year, while South Korean consumption remained stable but subdued between November and January. Production levels have since normalized following scheduled furnace maintenance, with demand expected to stabilize further after the Lunar New Year period.
Japan’s stainless scrap consumption has remained steady, although export volumes have declined as domestic mills increasingly prioritize locally sourced material.
China and Indonesia policies reshape raw material flows
China has introduced tighter export controls on stainless steel products, requiring government approval for overseas shipments of coils as well as flat and long products. Together with Indonesia’s reduction in nickel ore quotas, these measures have encouraged Chinese stainless producers to accelerate procurement of raw materials, particularly stainless scrap and nickel pig iron.
India and Middle East markets remain relatively resilient
In 2025, India recorded strong growth in stainless steel production, rising 14 percent year on year to 4.27 million mt, while stainless scrap imports increased by 21 percent to 1.47 million mt. Despite higher output, weaker export demand has enabled Indian mills to meet a larger share of requirements through domestic scrap generation supported by competitive pricing and favorable financing conditions.
In the Middle East, stainless steel and special alloy demand remained stable during the fourth quarter, supported mainly by construction, oil and gas, and desalination projects. Saudi Arabia continues to rely on imported scrap due to limited domestic availability, maintaining steady regional trade flows.