Scrap prices resilient as iron ore continues to fall

Global: Despite recent weakness in finished steel and iron ore prices, ferrous scrap values have been moving within a relatively narrow band. Indeed, Recycling International’s cfr price indications for shipments from Europe to Turkey have gained a little ground since our late-April report to US$ 265-270 per tonne for standard quality HMS I/II 80/20 scrap and US$ 270-275 for shredded.

In recent days, Turkish mills have ramped up their scrap buying activity in anticipation of a post-Ramadan boost in steel orders. In China, meanwhile, the enforced closure of substandard induction furnaces has increased the domestic scrap supply and heaped pressure on prices.

Through numerous small reductions, leading domestic consumer Shagang has shaved more than US$ 50 per tonne from its scrap purchasing prices over recent months, reducing payments to levels last seen in the third quarter of 2016.

As pointed out at the recent BIR ferrous division meeting in Hong Kong, recent trends in China have released some volumes of scrap into the export channel, with shipments reported to India, Japan, South Korea and Taiwan.

However, most experts believe these flows will be short-lived. Global crude steelmaking capacity utilisation surged to 73.6% in April - equivalent to increases of 2.5 percentage points over the same month last year and of 1.7 points over March 2017.

World crude steel output amounted to 550.841 million tonnes across the first four months of 2017 and exceeded the January-April 2016 total by 5.2%, or more than 27 million tonnes.

 

The full version of Recycling International’s latest ferrous market report will appear in its No. 4/2017 issue.



Sign up now for our free, weekly newsletter

advertisement