Market analysis: Ferrous, April 2008
Crazy conditions give cause for concerns
Steel and scrap prices have exploded in March - but good reasons for this are hard to find. With supply and demand clearly out of balance, the scrap industry fears a collapse could occur in the second or third quarter of 2008. Steel prices appear to have entered a stable period with no heavy falls expected. Freight rates from Rotterdam to Turkey have returned to US$ 50-55 per tonne, while rates from the USA to Turkey are nearer US$ 65-70. The US Composite price jumped US$ 22 per long ton in early March to US$ 351.17 and remained at that level during the rest of the month, while new automobile bundle auction prices recovered to US$ 393 per tonne. In the final days of March, fob Rotterdam scrap prices have risen to US$ 505 per tonne for standard quality 80/20 HMS I and II, US$ 515 for shredded, and US$ 490 for the 50/50 HMS I/II mix.
Market analysis: Ferrous, March 2008
Scrap prices peak as steel boom continues
Whereas steel prices have risen for the fourth consecutive month, scrap appears to have reached a peak. Lower deepsea freight rates in January and a renewed decline in the value of the US dollar in relation to the Euro and other leading currencies have prompted major scrap purchasers in Turkey and elsewhere to desist from the panic buying witnessed last December. In February, Turkey has paid USS 455 per tonne cfr for 80/20 HMS 1/11. However, the US Composite price fell in mid-February to USS 322.50 from USS 329.17 per tonne earlier in the month, while returns from automobile factory bundle sales fell USS 10 per tonne following the record USS 95 increase in January. In Japan prices rose over USS 35 per tonne. In the final days of February, fob Rotterdam prices were flat at USS 405 per tonne for standard quality 80/20 HMS I and 11 scrap, USS 410 for shredded and USS 390 for the 70/30 HMS 1/11 mix.
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Market analysis: Ferrous, January/February 2008 (PDF, 1271 kB, 4 pages)
Price explosion rocks ferrous market
An unprecedented price explosion of no less than US$ 80 to 90 per tonne was seen in the final weeks of 2007 and in early January. Turkey urgently needed scrap, especially as supply from Baltic and Black Sea ports stagnated due to adverse weather conditions; by mid-January, Turkish mills were buying heavy scrap at US$ 460 per tonne cfr. Meanwhile, China has been buying major tonnages in the USA again. US automobile factory bundle sales for January jumped no less than US$ 95 per tonne while the US Composite price leapt to US$ …. per tonne in mid-January. However, owing to these sudden increases, it is feared that scrap substitutes such as pig iron and DRI/HBI may yet spoil the party for scrap traders in the first or second quarter of 2008. In the third week of January, fob Rotterdam prices have risen to: US$ 400 per tonne for standard-quality 80/20 HMS I and II scrap; US$ 405 per tonne for shredded; and US$ 380 per tonne for the 60/40 HMS I/II mix.
Market analysis: Ferrous, December 2007 (PDF, 976 kB, 4 pages)
Scrap market lifted by rising shipping rates
Unlike domestic and fob export prices, delivered scrap export prices are showing signs of improvement as rapidly-rising shipping freight rates have eaten up all the recent gains in cfr/cif prices. Turkey has raised its cif prices for fear of being deprived of scrap towards year-end and to compensate exporters for the continuing decline of the US dollar in relation to the Euro, the Yen and China’s renminbi Yuan. Disappointing news emerged from the USA where automobile factory bundle auction prices dropped US$ 25 per long ton in November, but recovered by US$ 15 on November 20. Latest fob Rotterdam prices include: US$ 305 per tonne for 80/20 HMS I/II scrap; US$ 310 for shredded and US$ 295 for the 60/40 I/II mix.
Market analysis: Ferrous, November 2007 (PDF, 836 kB, 4 pages)
Late-year recovery will be minimal at best
Hopes for better scrap returns in October did not materialise as prices for long steel products - especially rebar and debar - gradually declined during the month; in Turkey, they fell no less than US$ 40 per tonne. Deep-sea shipping freight rates rose again in October to exceed US$ 75 per tonne for cargoes from the USA to Mediterranean destinations. Although Turkey was forced to increase its cif/cfr prices for 80/20 material to some US$ 345 per tonne, higher freight rates and the weakness of the US dollar meant barely any improvement in exporters’ net yields. Domestic scrap prices in the USA, the EU and Japan declined some US$ 5-10 per tonne last month. Chinese scrap imports were again minimal whereas South Korea bought more scrap from abroad. Latest fob Rotterdam prices include: US$ 290 per tonne for 80/20 HMS I/II scrap; US$ 295 for shredded; and US$ 280 for the 60/40 I/II mix.
Market analysis: Ferrous, October 2007 (PDF, 3052 kB, 4 pages)
No improvement in September
Contrary to the predictions of many people, international scrap export prices did not improve last month, mainly due to ever-rising deep-sea freight rates. Nevertheless, the US Composite price for domestic deliveries managed to increase US$ 11.33 per long ton to US$ 265.50 in mid-September. Both China and Turkey bought only limited tonnages of scrap last month. With iron ore prices widely expected to increase 25-40% following annual contract negotiations, scrap prices are expected to benefit in the fourth quarter of 2007 or in early 2008. Latest fob Rotterdam prices include: US$ 275 per tonne for 80/20 HMS I/II scrap; US$ 280 for shredded; and US$ 265 for the 60/40 I/II mix
Market analysis: Ferrous, September 2007 (PDF, 1275 kB, 4 pages)
Ferrous scrap - freight rates spoil the price party
Turkey was forced to increase its delivered scrap prices by some US$ 10-20 per tonne in August because exporters, who had seen shipping freight rates rise to levels which are more than 50% higher than at the start of the year, simply refused to sell at the prices on offer. The US Composite and automobile factory bundle price edged higher and Japan also witnessed an upward price trend; however, prices in Europe have fallen over the past month.
Market analysis: Ferrous, July/August 2007 (PDF, 1098 kB, 4 pages)
No summer improvement for ferrous market
After two excellent quarters for the scrap trade, prices went down in the early summer and were, at best, trading sideways in early August. After around 10 weeks of hand-to-mouth scrap buying, Turkish mills returned to the market in the second week of July, but the prices offered by them brought no relief from the negative factors affecting the market such as: the low rate of exchange of the US dollar in relation to the Euro, Yen and other currencies, ever-rising deep-sea freight rates; and, of course, summer mill closures in Europe, the USA and Japan. No improvement in the world scrap market is now envisaged until September, with fob prices having fallen well below the US$ 300 per tonne mark. Latest fob Rotterdam prices include: US$ 275 per tonne for 80/20 HMS I/II scrap; US$ 280 for shredded; and US$ 260-265 for the 60/40 I/II scrap mix.
Market analysis: Ferrous, June 2007 (PDF, 2846 kB, 3 pages)
Ferrous prices retreat below US$ 300
Having risen to over US$ 325 per tonne fob Rotterdam in March, ferrous scrap prices are now back at US$ 290-295, with even lower levels applying on the US East and West Coast. The main reasons behind this drop include: a steep increase in deep-sea freight rates; limited buying from Turkey; the enduring absence of Chinese buyers from the market; increased scrap collection volumes owing to a generally mild winter; the still-low US dollar exchange rate; and an extremely low US Composite price of US$ 240.83, which remained unchanged in May. In early June, fob Rotterdam prices were at: US$ 295 per tonne for 80/20 HMS I/II scrap, US$ 300-305 for shredded and US$ 290 for the 60/40 I/II mix.
Market analysis: Ferrous, May 2007 (PDF, 856 kB, 3 pages)
Prices suffer a second-quarter reverse
After having risen too high and too fast earlier this year, scrap prices appear to have suffered a reaction in the second quarter. Prices on a cfr Turkey basis fell some US$ 15 per tonne in late March - a decline precipitated by one major trader selling no less than 150 000 tonnes at US$ 155 cfr Turkey - some US$ 15 below earlier sales levels. This was the signal for Turkish mills to abstain immediately from purchasing scrap in anticipation of further declines. US automobile factory bundles fell US$ 10 per tonne for April after four consecutive monthly increases had added US$ 135 per tonne. Mid-April, the US Composite price fell to a relatively low US$ 271 per long ton. Late April fob Rotterdam prices are: US$ 305 per tonne for 80/20 HMS I/II scrap, US$ 310 for shredded, and US$ 295 for the 60/40 I/II mix.
Market analysis: Ferrous, April 2007 (PDF, 923 kB, 4 pages)
Steel and scrap prices spiral ever higher
Scrap prices have jumped some US$ 75 per tonne so far this year - but steel price increases have been even steeper. Both have reached a dangerously high level and are vulnerable to a sudden collapse, as occurred in June last year. If this were to happen, then processors and merchants would doubtless blame each other for triggering excessively rapid price increases. In addition to record scrap levels, recent weeks have also seen continuing weakness in the US dollar and a significant rise in deep-sea freight rates to, once again, more than US$ 35 per tonne from Rotterdam and US$ 45 from the US East Coast to Turkey. Latest fob Rotterdam prices include: US$ 325 per tonne for 80/20 HMS I/II scrap; US$ 320 for shredded; and US$ 300-305 for the 60/40 scrap mix.
Market analysis: Ferrous, March 2007 (PDF, 756 kB, 3 pages)
Firm steel markets boost scrap prices
Thanks to largely mild winter conditions and a still-booming world economy, demand for construction steel - and hence, scrap - has been exceptionally strong in most parts of the world. A weaker US dollar and dwindling scrap exports from Russia/the Ukraine pushed prices for better qualities of scrap to beyond US$ 300 per tonne fob Europe last month. Elsewhere, China raised its domestic purchasing prices by a somewhat surprising 10%; prices in Japan have increased on an almost weekly basis over the last two months; and US automobile bundle auction prices increased for the second consecutive month by more than US$ 30 per tonne. Latest fob Rotterdam prices include: just above US$ 300 per tonne for 80/20 HMS I/II scrap, US$ 305-310 for shredded, and US$ 290-295 for the 60/40 scrap mix.
Market analysis: Ferrous, January-February 2007 (PDF, 1101 kB, 4 pages)
Early-year increase in ferrous scrap prices
Declining scrap exports from Russia and the Ukraine forced Turkey to increase its purchasing prices in mid-January by US$ 15-25 per tonne, with the 80/20 HMS I/II mix now exceeding US$ 300 a tonne. Once more, however, exporters in the USA and Europe have had their gains trimmed by a US$ 8-10 per tonne increase in freight rates since early December. With international scrap trading conducted in US dollars, European exporters were also hit by the weakness of the US dollar in relation to the Euro. Meanwhile, mild winter conditions in Europe and the USA have boosted construction activity and hence the need for scrap. Towards the end of January, fob Rotterdam prices stood at US$ 270-275 per tonne for 80/20 HMS I/II scrap, US$ 275-280 for shredded, and US$ 260-265 for the 60/40 I/II scrap mix.
Market analysis: Ferrous, December 2006 (PDF, 1082 kB, 4 pages)
Sideways look to the scrap market
There was barely any change in scrap prices during November. Turkish buyers purchased material on a hand-tomouth basis while the Chinese abstained from ordering deep-sea cargoes for the sixth consecutive month. In the USA, where scrap prices slid a few dollars per tonne, steel mills’ finished product prices suffered further falls. Yields for dollar-based exporters have been further reduced by the weakness in the currency. Having risen significantly in October, freight rates fell to the extent that scrap shipments from Rotterdam to Turkey are being quoted at some US$ 23 to 25 per tonne. At the start of December, fob Rotterdam prices stood at US$ 250 per tonne for 80/20 HMS I/II scrap, US$ 255 for shredded, and US$ 240 for the 60/40 I/II scrap mix
Market analysis: Ferrous, November 2006 (PDF, 1222 kB, 4 pages)
Market invaded by signs of weakness
Doubts surround scrap price levels for the first quarter of 2007. Turkey, currently the main buyer of deep-sea scrap cargoes given China’s virtual absence from the market, is unwilling to pay more than US$ 277 per tonne cfr for 80/20 HMS I/II which, when taking into account sky-high freight rates, equates to US$ 247 fob Europe and US$ 240 fob US East Coast. China is buying on a hand-to-mouth basis, purchasing major tonnages of scrap only in Japan, but at very low prices which would leave US West Coast exporters with no margin. At the start of November, fob Rotterdam prices remain virtually unchanged at US$ 245 per tonne for 80/20 HMS I/II scrap, US$ 252 for shredded, and US$ 235 for the 60/40 HMS I/II mix.
Market analysis: Ferrous, October 2006 (PDF, 974 kB, 4 pages)
Price recovery may be short-lived
After the traditional July/August scrap market lull, prices rebounded US$ 15 to 20 per tonne in the first half of September to regain much of the ground lost earlier. Subsequent slight increases were more in compensation for ever-rising deep-sea freight rates and a weak US dollar. Given that scrap demand is struggling to keep pace with global collection levels, there are fears of a renewed decline in prices during the course of the final quarter. At the start of October, fob Rotterdam prices have increased to US$ 245- 250 per tonne for 80/20 HMS I/II scrap, US$ 255 for shredded, and US$ 230-240 for the 60/40 HMS I/II scrap mix.
Market analysis: Ferrous, September 2006 (PDF, 790 kB, 3 pages)
Brighter prospects for September?
The scrap market witnessed a flow of unexpected bad news in August. After a heavy fall in the August autobundle auction prices in the USA, the US Iron Age composite price dropped to US$ 195.33 from US$ 232.50 in July. Prices for Brazilian and Russian pig iron fell around US$ 40 per tonne and HBI also declined markedly. On a positive note, fourth-quarter price increases were announced for domestic deliveries of new steel in the USA and Europe; however, it is doubtful whether all of these will prove sustainable. Mills will have to replenish their scrap stocks before the winter and so prices are expected to rise in September or in the fourth quarter. At the start of September, fob Rotterdam prices have fallen to US$ 230 per tonne for 80/20 HMS I/II scrap, US$ 235-240 for shredded, and US$ 225 for the 60/40 HMS I/II scrap mix.
Market analysis: Ferrous, July-August 2006 (PDF, 1057 kB, 4 pages)
Markets fall victim to summer lull
With Turkey and the Far East virtually absent from the scrap market during the summer months, scrap prices fell some US$ 15 per tonne in the US and EU export markets during July. This decrease reflects a declining steel market and the fact that Chinese steel exports have flowed freely. Domestic scrap markets on the European continent were able to maintain the higher levels until mid-July thanks to still-buoyant new steel demand. Due to the traditional two- to four-week August closures at many steel mills in France, Italy and Spain, EU scrap prices are expected to fall further in August. However, they could regain ground in September when traditional buyers will be forced to return to the market. Fob Rotterdam prices have fallen to around US$ 250 per tonne for 80/20 HMS I/II scrap, to US$ 255 for shredded, and to US$ 240 for the 60/40 HMS I/II mix.
Market analysis: Ferrous, June 2006 (PDF, 1141 kB, 4 pages)
Prices edge higher in June
The Far East has raised its scrap purchasing prices by more than US$ 15 per tonne; for example, at the end of may, South Korea has been buying HMS I at US$ 279.50 per tonne cfr, which equates to around US$ 240 fob. China is also making a reluctant return to the import market. Re-entering the market in late May, Turkish buyers have paid up to US$ 280 per tonne cfr for 80/20 HMS I/II for June delivery. Sea freight rates for scrap going from the USA to Turkey are US$ 25-27 per tonne; from Rotterdam and UK ports to Turkey, rates are around US$ 20-22 per tonne. At the time of writing, fob Rotterdam prices have risen to US$ 255-260 per tonne for 80/20 HMS I/II scrap, to US$ 260-265 for shredded, and to US$ 250-255 for the 60/40 I/II mix. According to feedback from the latest BIR Convention in Beijing, the scrap trade is generally expecting further price increases in June.
Market analysis: Ferrous, May 2006 (PDF, 765 kB, 3 pages)
Prices rebound after April dip
Scrap prices fell US$ 10 per tonne in mid-April because regular buyers in Turkey, Spain and the Far East abstained from the market. This was because they expected a renewed flow of scrap from CIS countries now that the Black Sea and Baltic ice has disappeared. In the event, domestic demand in Russia and the Ukraine mopped up the additional supply. Meanwhile, Chinese and South Korean mills declined to pay more than US$ 270 to 280 per tonne cfr. Hopes are higher for the rest of the second quarter because of increased prices for competing commodities such as pig iron and DRI and a lower exchange rate of the US dollar. On May 2, fob Rotterdam prices had again risen to 250-255 US$ 245-250 per tonne for 80/20 HMS I/II, US$ 260-265 for shredded, and US$ 245-250 for the 60/40 I/II mix.
Market analysis: Ferrous, April 2006 (PDF, 658 kB, 3 pages)
Scrap and steel prices rebound in March
In the second half of March, scrap prices were trading sideways in the USA but rose by roughly US$ 15 per tonne in the EU thanks to renewed Turkish purchasing. Steel prices have also firmed in March and mill order books are well filled for the second quarter, especially for hot rolled coil and reinforcement bars. As a result, the scrap trade reasons that there must be room for somewhat better scrap prices in the Spring. Negative factors include somewhat higher freight rates and the rising value of the Euro in relation to the US dollar. In the fourth week of March, fob Rotterdam prices were standing at US$ 230-235 per tonne for 80/20 HMS I/II, US$ 235-240 for shredded and US$ 225-230 for the 60/40 I/II mix.
Market analysis: Ferrous, March 2006 (PDF, 730 kB, 3 pages)
Severe winter weather prompts price increases
Turkey, the world’s leading scrap importer, began sourcing its supplies from the USA and EU rather than from the former CIS countries after freezing conditions hit Black Sea ports and the seaway through the Bosphorus. There was another increase in the fob prices of 80/20, 60/40 and shredded scrap in early February, but the consensus is that prices will fall in March - or when the weather improves. In the third week of February, fob Rotterdam prices were standing at US$ 215-220 for 80/20 HMS I/II, US$ 220-225 for shredded, and US$ 120-215 for the I/II mix
Market analysis: Ferrous, January/February 2006 (PDF, 524 kB, 3 pages)
Bad start to the new year
Last year was not a good one for scrap with fob Rotterdam prices falling nearly 15%. However, steel fared much worse with prices for flat steel dropping by some 40% and long steel by even more. December brought a slight fall in European scrap prices whereas US levels, which had held surprisingly firm for most of the fourth quarter, finally followed the global downward trend. Turkish and Chinese mills imported only on a hand-to-mouth basis and exporters had to accept much lower price levels. The US$ 5 per tonne increase in c&f Turkey prices was generally seen as compensation for recent exchange rate movements. In the second week of January, fob Rotterdam prices were standing at US$ 190 for 80/20 HMS I/II, US$ 200 for shredded, and US$ 180 for the 60/40 mix.
Market analysis: Ferrous, December 2005 (PDF, 562 kB, 3 pages)
Scrap prices follow different paths
In early November, the international scrap market witnessed a rare phenomenon: US domestic scrap prices went up markedly whereas European scrap export prices either remained steady or fell back. Asian demand remained low except for shredded scrap, while Turkey and Spain bought largely on a hand-to-mouth basis at low prices of around US$ 200 fob. Except in the USA, steel prices have yet to show signs of a recovery. The US dollar has strengthened in relation to the Euro but transatlantic freight rates have also risen. Steel mills in the Far East and in Turkey looked to push down cfr/c&f scrap prices in October, leading to a fall in fob prices to below US$ 200 for the lower qualities. In the third week of November, fob Rotterdam prices stood at US$ 205 for 80/20 HMS I/II, US$ 215 for shredded and US$ 195 for the 60/40 mix.
Market analysis: Ferrous, November 2005 (PDF, 687 kB, 4 pages)
Little hope of a year-end revival
Following an early-October spike in scrap prices, the rest of the month brought the erosion of many of the price gains made during the third quarter. Major traditional scrap importers such as Turkey, Spain, Italy, Taiwan and Korea have been more or less absent from the market in recent months. The prices of scrap alternatives - pig iron and HBI/DRI - have also been sluggish. By contrast, increases have been recordedat the monthly automobile bundle auctions for November but the US Composite price remained at its low level of US$ 201.33. In early November, fob Rotterdam prices are standing at US$ 200 per tonne for 80/20 HMS I/II, US$ 210 for shredded and US$ 195 for the 60/40 mix.
Market analysis: Ferrous, October 2005 (PDF, 536 kB, 3 pages)
Scrap markets in a tail-spin
By mid-September, all the main importing countries had withdrawn from the ferrous scrap market. Turkey, Spain and the Far East are currently refraining from buying scrap, obviously in the expectation of another price drop to add to the US$ 20 per tonne decline of early September. However, scrap exporters should derive some comfort from forecasts of higher iron ore prices in the year to come, a move which will drag scrap’s competitor commodities to higher levels. Ocean freights for Panamax- and Handymax-size ships went down in September while European traders benefitted from a stronger US dollar in relation to the Euro. By early October, fob Rotterdam asking prices stood at US$ 205 per tonne for 80/20 HMS I/II, US$ 215 for shredded and US$ 200 for the 60/40 mix.
Market analysis: Ferrous, September 2005 (PDF, 578 kB, 3 pages)
The market takes off again, but for how long?
Panic buying by mills in Europe and the USA - although not in the Far East - has driven up prices to levels not too far short of the November 2004 peaks. Although in the interests of neither the steel producers nor, in the longer term, the scrap trade, mills have been falling over each other to obtain scrap in order to replenish their stocks. Ocean freight rates had fallen markedly in July but are now rising rapidly again in the run-up to the grain season. In early eptember, fob Rotterdam prices stood at US$ 250 per tonne for 80/20 HMS I/II, US$ 255 for shredded and US$ 240 for the 60/40 mix.
Market analysis: Ferrous, July/August 2005 (PDF, 611 kB, 3 pages)
Wild ride on the summer roller-coaster
It has become obvious that steel mills all over the world were responsible for an excessive reduction in May/June scrap prices. Predictably, scrap collection stagnated and traders were not willing to sell at such low levels during the summer months. Scrap-hungry steel mills in the southern EU and Turkey then panicked and offered prices US$ 30-60 per tonne higher than in early June. Their scrap needs were duly met and, within two to three weeks, they had dropped their prices by a further US$ 10-30. Since mid-July, the see-saw has come to rest at between US$ 185 and 200 fob West European and Eastern US ports for HMS I. Meanwhile, shipping freight rates have continued to fall. In early August, fob Rotterdam prices stood at US$ 195 per tonne for 80/20 HMS I/II, US$ 200 for shredded, and US$ 185 for the 60/40 mix.
Market analysis: Ferrous, June 2005 (PDF, 187 kB, 3 pages)
Scrap prices yet to bottom out
Scrap prices continued their free-fall in May and no relief appears likely in June. Steel mills everywhere seem unable to maintain high sales prices for new steel and stocks are piling up; the same problem exists for the scrap sector as leading buyers in Turkey and the Far East are still showing little or no purchasing interest. Fob prices for steel scrap have fallen well below the US$ 200 per tonne level. The only relief has come in the form of lower freight rates and, for Euro-zone exporters and a strengthening of the US dollar. In early June, the fob Rotterdam price stood at US$ 155 for HMS I, US$ 165 for shredded and US$ 145 or the 60/401/11 mix.
Market analysis: Ferrous, May 2005 (PDF, 580 kB, 3 pages)
US and European prices go their separate ways
Scrap demand from the main importing markets remains weak despite a dramatic increase in iron ore prices for 2005 delivery, which in turn has influenced ore-derived commodities such as sponge and pig iron. European scrap prices fell heavily in April, but US prices have improved over the past month. However, falling long steel prices around the world are likely to drag down scrap prices for May. By early May, fob Rotterdam prices stood at US$ 210-215 for HMS I, US$ 240-245 for shredded and US$ 200-210 for the 80/20 HMS I/II mix.
Market analysis: Ferrous, April 2005 (PDF, 491 kB, 3 pages)
Will scrap follow the iron ore price explosion?
With iron ore prices to increase by an unprecedented 71.5% for 2005, the question arises: will this induce steel mills to switch to a higher percentage of scrap at the expense of ore-derived pig and sponge iron? This seems likely given the steep decline in scrap prices during the first quarter, and the fact that the hike in iron ore prices will inevitably haul pig and sponge iron values to new heights. Already, there has been an impact on raw and finished steel prices. By mid March, fob Rotterdam prices were standing at US$ 200-215 for HMS I, US$ 220-240 for shredded and US$ 195-210 for the 70/30 I/II mix.
Market analysis: Ferrous, March 2005 (PDF, 578 kB, 3 pages)
Few buyers in a dull market
The scrap market appears rather dull at present with traditional scrap importers showing reluctance or even disinterest in buying scrap. Traders reportedly hold large, unsold stocks. The US and EU export markets fell by a further US$ 10-20 per tonne in January and the only relief has come from a slightly stronger US dollar and a minor decline in shipping freight rates. Japan has seen domestic prices fall for 15 consecutive weeks; in the USA, meanwhile, the Composite price also declined and Automobile Factory Bundles dropped by US$ 65 per tonne. By mid February, fob Rotterdam prices stood at US$ 205-215 for HMS I, US$ 220-230 for shredded and at US$ 200-210 for the 70/30 I/II mix.
Market analysis: Ferrous, January 2005 (PDF, 626 kB, 3 pages)
Slightly improved prices, but few buyers
Having appeared to bottom out in late 2004 at slightly above US$ 200 fob Rotterdam, scrap prices have improved somewhat in early January. For European and US East Coast traders, export opportunities are restricted mainly to Turkey and Spain. Despite slightly lower shipping rates and a stronger US dollar against the Euro, opportunities to sell to the Far East remain very limited; indeed, US West Coast traders seem to be alone in being able to ship major volumes to China and Korea. Meanwhile, mills in the USA and Europe have significantly reduces their scrap surcharges on new steel. In early january, fob Rotterdam prices stood as US$ 220 per tonne for HMS I, US$ 230-235 for shredded, and US$ 205-220 for the 70/30 mix.
Market analysis ferrous, December 2004 (PDF, 511kB, 3 pages)
Scrap prices head south in November
The scrap market dipped sharply in the second and third weeks of November, particularly in South East Asia and Turkey where price falls of US$ 40-50 per tonne were recorded. Coupled with a weaker US dollar in relation to the Euro and still high - but slightly lower - shipping freight rates, this resulted in a lifeless market with mills adopting a wait-and-see approach and many large exporters refusing to offer scrap at below US$ 200-215 fob. At the end of November, fob Rotterdam prices stood at US$ 210 for HMS I, US$ 230 for shredded and US$ 200-205 for the 80/20 mix of HMS I/II.
Market analysis ferrous, November 2004 (PDF, 578kB, 3 pages)
Prices fall in November - but for how long?
The scrap market moved sharply upwards in October in line with global increases for virtually all raw materials. But having risen by US$ 40 per tonne or more in some instances, ferrous scrap prices fell by around the same amount during and after the BIR's London convention in late October. The decline was attributed to a lack of buying from China, India and Turkey, albeit for differing reasons. Since India is now allowing only shredded scrap to be imported without restrictions, shredded scrap has maintained its high price and widened its differential to other grades. Prices at the November US automobile bundles auction rose by US$ 20 per tonne. In the first week of November, fob Rotterdam prices stood at around US$ 240 for HMS I, US$ 270-280 for shredded and US$ 230 for the 50/50 HMS I/II mix.
Market analysis ferrous, October 2004 (PDF, 241kB, 3 pages)
Scrap prices set for stable final quarter?
September brought yet another upheaval in scrap prices. With winter fast approaching and fears of CIS moves to curtail exports yet further, demand for scrap remains healthy. Steel prices remain firm and appear set to rise again in 2005, while prices for ores, pig iron, sponge iron and coking coal have also stayed strong. Fob Rotterdam prices in the first week of October stood at US$ 235-240 for HMS I, US$ 245-250 for shredded and US$ 230-235 for the 80/20 HMS I/II mix.
Market analysis ferrous, September 2004 (PDF, 122kB, 4 pages)
Autumn recovery to follow August decline?
In contrast to steel prices, the scrap market tumbled in the second half of August. Prices fell by some US$ 50 a tonne in the USA and by a similar amount for shipments to the Far East and Turkey. Prices remained relatively stable in Europe but also dropped at the end of August. However, traders are expecting a modest revival in late September or October given the continuing strength of the steel market, the high values of iron ore, pig iron and coal, high shipping rates, and the weakness of the US dollar in relation to the Euro and Yen. Fob Rotterdam prices in the first week of September stood at US$ 225 for HMS I, US$ 230 for shredded, and US$ 210 for the 50/50 mix of HMS I/II.
Market analysis ferrous, July/August 2004 (PDF, 1.331 kB, 4 pages)
Paradise regained for scrap prices
For the second time this year, scrap prices have exploded because mills had obviously driven their purchasing prices too low and merchants were no longer willing to sell at around US$ 150 per tonne fob. Indeed, merchants have held back on sales against a backdrop of world steel production heading towards 1 billion tonnes this year, a lower US dollar rate in relation to the Euro and other currencies, even higher shipping freight rates, China making a hesitant return to the market, and the onset of the summer holidays. Armed with well-filled order books, mills began to panic and scrap prices once again headed over US$ 300 per tonne c&f Asia. At the end of July, fob Rotterdam prices stood at US$ 235 per tonne for HMS I, US$ 245 for shredded and US$ 225-230 for the HMS I/II mix.
Market analysis ferrous, June 2004 (PDF, 639 kB, 3 pages)
Don’t panic!
Far East scrap prices have fallen below US$ 205 c&f mainly due to the absence of Chinese buyers throughout May. Traders had hoped that they would have made an earlier return to the market, but in vain. In the meantime, exporters have been undercutting each other on East Asian scrap delivery tenders for the third quarter. Nevertheless, there is still a general feeling among traders that the market has bottomed out. In early June, fob Rotterdam prices stood at around US$ 160 per tonne for HMS I, US$ 170 for shredded and US$ 150 for the HMS I/II mix.
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