Asian Metal: Mr. Mittal, thank you for accepting this interview. Please give us a brief introduction to Pet Alliance.

Jatin: It’s my pleasure. Pet Alliance was founded in 2005, majoring in dealing with stainless scrap both at home and abroad, with a monthly trading volume of 2,000-3,000mt. India is Pet Alliance’s major export destination at the moment.

Asian Metal: Thanks for your introduction. Many participants have been complaining about this year being particularly difficult, so how do you at Pet Alliance find the current state of the market in 2015?

Jatin: Yes, the market in 2015 has been extremely sluggish all over the world and has shown no signs of recovery to date, in line with the downward price trend, with a markdown of around 15% in the past four months. Besides, since it is the traditional off-season, manufacturing industry is performing weakly, preventing the demand for stainless scrap from becoming any stronger. Pet Alliance mainly collects materials within Thailand and then exports them to other countries. The purchase cost remains high right now, while the sale price is not so appealing. As a consequence, I have halted the business for a while and am holding a wait-and-see attitude regarding the market outlook.

Asian Metal: Are there any positive points about the stainless scrap market?

Jatin: To be honest, I don’t think there are any positive signs for the stainless scrap market at the moment. Economies in major markets like the Eurozone, China, Japan, South Korea and so on appear gloomy and currencies keep depreciating, and even though governments are endeavoring to release stimulus policies to rescue their economies, the effects have been faint and overall demand for stainless scrap continues to be slim. What matters is demand, and it is hard to see this getting any stronger in the near future.

Asian Metal: How is supply and demand looking in the spot market for stainless scrap?

Jatin: Supply exceeds demand in general at the moment, that’s why the price keeps decreasing. Most downstream customers are complaining that there are few orders for finished stainless steel, while scrap continues to swarm into the market.

For myself, India is the major export target. Although demand there is getting stronger with an increase in local government infrastructure spending policies, it is far below target levels, since local government has restrictions on imports, and thus the export business there remains unclear. To avoid losses, I have reduced my stocks from a regular level of 2,000t to the current 500t and do not plan to supplement it in the near future.

I have got some figures on supply and demand for stainless scrap. In Europe, stainless steel distributors are working hard on reducing their inventory levels, affected by the downward LME nickel price trend and depreciation in alloy surcharges. In Japan, stainless steel scrap exports decreased by 16.7% month-on-month to 18,715 tonnes in July of this year. In Taiwan, it’s reported that major stainless steel mills are planning to cut their production capacity.

Asian Metal: In light of this, what does the future hold for Pet Alliance? Are there any plans to develop the business?

Jatin: Yes, business development is essential for the survival of an enterprise. As I mentioned before, I plan to halt business for a while. But in the future, I will enlarge the scope of our operation, from the current 304 and 316 to 200 and 400 series. Meanwhile, development of other metal scraps will also be taken into consideration. Besides India, I also plan to export to other markets, like Japan and South Korea.

Asian Metal: What about the African market? I understand Africa occupied a 5.7% market share globally for foreign direct investment in 2014, and many carbon steel traders are endeavoring to explore the market there now. Do you plan to export materials there?

Jatin: I don’t think exploring the African market is a good idea for a stainless scrap trader, because as far as I know, there is only one stainless steel mill within Africa, which is located in South Africa. Therefore, the demand for stainless scrap would be limited.

Asian Metal: Prices for raw materials keep decreasing and the price of nickel on the LME dropped below USD10,000/t recently, so what do you think the market outlook is like for stainless scrap? Is it possible the latter will rebound?

Jatin: Yes, the price of nickel on the LME has witnessed a markdown of around 12% in the past month and it shows no signs of rebounding right now with market anxiety over an interest increase by the FED.

Personally, I am not too optimistic about the market outlook for the remainder of this year because of the gloomy economy, as well as the weak downstream demand, although “Golden September” and “Silver October” stand among the traditional peak months for stainless scrap on the international market.

Meanwhile, considering that demand isn’t very strong and is likely to be less than it has been during the peak season in previous years, the price will be powerless to increase dramatically in the short term.

Asian Metal: Thank you very much Mr. Mittal, we wish you all the best in your new ventures.