The year may end on a modestly better note if the sentiment dealers are expressing in early fall holds. After experiencing difficult markets in 2015 and some difficulties during the first half of this year, many nonferrous metals have found solid footing. Several sources say markets in general haven’t seen a major change for the better in terms of price, though there are more positive indicators than earlier this year.

Far from being unbridled optimists, some dealers say they feel the bottom has been reached and some modest price improvements are being seen. While supply remains a challenge, they are more bullish about prices over the next six months.

*Average monthly settlement price, cash buyer; U.S. dollars per metric ton. Source: London Metal Exchange,

Stainless steel may be the nonferrous metal showing the best near-term upside for scrap metal dealers. Driving this optimism is the lack of nickel supply on the global market. Several years ago, the Indonesian government implemented a ban on the export of ores, which created concern that nickel consumers in China might have a difficult time obtaining enough material to meet their needs. As the largest producer of stainless steel in the world, China’s ore and scrap purchases greatly affect pricing.

While the ban created some concerns, the Chinese economy has been slowing, so the negative impact so far has been muted. Now, at the same time as signs of a modest improvement in the Chinese economy, the Philippines, which has become one of the major suppliers of nickel, has been shutting down a number of mines, leading to more questions about nickel supply.

While tightness in primary nickel supplies could result in better prices for nickel and stainless steel scrap, as the year comes to an end, the signals are mixed. Shipments of nickel to India, a key end market, increased over the first half of the year. Now, however, it appears that Indian buyers have ample supply and that demand for finished stainless steel has not been as robust, which is leading to some pullback in demand during the third and fourth quarters.

Stainless steel may be the nonferrous metal showing the best near-term upside for scrap metal dealers.

While a short-term runup in stainless steel scrap occurred, several sources say they feel prices may soften somewhat by the end of the year. Despite a possible dip, more stainless steel scrap dealers say they see prices strengthening through the first quarter of 2017.

A source says some of the more common stainless steel scrap grades are trading in a narrow range, which may indicate a bottom has been reached. If, he continues, nickel is perceived to be in short supply, more consumers will seek to buy stainless steel scrap as a substitute. If so, a more pronounced price increase could be seen.

Supporting the mildly bullish midterm outlook for nickel and stainless steel scrap, several speakers at the Institute of Scrap Recycling Industries (ISRI) Commodity Roundtable 2016, held in Chicago the middle of September, said steady increases in use of the metal could create some upward pricing pressure.

The research firm MEPS (International) Ltd., based in the United Kingdom, recently released a report that forecasts stainless steel prices to move up slowly in light of increased raw material costs and supply shortages in some regions of the world during the first half of 2017.