Point of view: Excess stainless scrap can weigh 1 sq. m.
Dealers and processors of stainless steel scrap in the United States are increasingly concerned that an oversupplied scrap market could affect prices in the first quarter.
Low domestic demand for stainless steel scrap and a steady influx of scrap to dealers and processors created a persistent oversupply in the fourth quarter and led to increased inventories from some scrap buyers.
Oversupply and declining nickel prices led stainless steel refiners to lower prices for individual trucks by 304 units on December 17 to 48-50 cents per pound, the lowest level since early November 2022.
Due to the seasonal decline in scrap purchases at U.
S. factories at the end of the fourth quarter, but lower demand for finished stainless steel led to this trend starting earlier this year, at the end of the third quarter.
Global stainless steel producer Outokumpu expected fourth-quarter shipments to decline by 5-15% compared to the third quarter, according to its third-quarter earnings report released in October, 4,400 to 11,200 metric tons less than in the fourth quarter of 2024. The company noted that it had not seen an increase in industrial activity or demand for stainless steel, and that consumption of cold-rolled flat rolled stainless steel decreased by 4% in the third quarter compared to the previous year.
Spanish competitor Acerinox, which runs a North American stainless steel plant in Kentucky, said in November that economic uncertainty in the United States had led to a delay in contract negotiations, which usually end by October but were supposed to end in November and December. Stainless steel demand and sales are expected to decline in the fourth quarter due to seasonal factors at the end of the year.
According to Worldsteel, in the third quarter of 2025, stainless steel plants in the United States produced 538,000 tons of finished steel, the lowest in a year and 21,000 tons less than in the previous year. However, the decline in factory output does not seem to be the main reason for the weakening of scrap markets. According to WorldSteel, production in the third quarter is still 56,000 tons higher than in the same period in 2024, and U.
S. production in the year to September increased by 9.3% to 1.65 million tons compared to the previous year.
Stainless steel plants typically purchase large amounts of scrap in the first quarter to produce more finished stainless steel products, which in turn increases demand for service centers as they replenish stocks depleted in the fourth quarter.
Dealers and processors of stainless scrap in the USA are increasingly doubtful about