Prices for 18-8 stainless scrap flirted with $2,800 a ton on a delivered-to-mill basis in the Pittsburgh market this month before settling in a range of $2,750 to $2,775 a ton, scrap industry sources said. The more than $250 increase from the prevailing mill price in August was driven entirely by the steadily rising price of nickel on the London Metal Exchange.

Demand for stainless scrap in the U.S. market has been so strong this year that it could account for the decline in sales to overseas markets, particularly those in Asia. U.S. exports of 18-8 scrap through the first half of this year were off by 6.6 percent from the same period last year.

Domestic demand for finished stainless steel products remains strong, particularly for commodity grades like 304 stainless. The only market that could see some weakening because of the higher prices is construction, where some architectural applications are price sensitive and substitution of 400-series stainless is possible.

American Metal Market September 14, 2006