Mill major anticipates ‘sustained lower scrap costs’

Global – ‘€˜We believe scrap prices will remain lower through the remainder of the year as there are no strong drivers to support significant price appreciation.’€™ So said Mark Millett, president and ceo of Steel Dynamics Inc, following the release of the company’€™s results covering an ‘€˜extremely challenging’€™ first quarter for its steel and metals recycling operations.

Indeed, his expectations of an improvement in the company’s results in the second quarter of 2015 and throughout the remainder of the year are based on ‘sustained lower scrap costs’ as well as a reduction in steel import volumes.

Millett has suggested scrap supply is more than sufficient and overseas demand subdued, adding: ‘Scrap pricing has reached a floor and a level of stability. The scrap recycling world is realising we are at a new level now.’

Ferrous scrap values are slightly higher towards the end of April than they were a month ago. Latest cfr price indications for shipments from Europe to Turkey are US$ 260-265 per tonne for standard quality HMS I/II 80/20 scrap and US$ 265-270 for shredded scrap.

For all 65 countries reporting to the WSA, crude steel output in March was 2.7% shy of that for the same month last year at 138.045 million tonnes and 7 million tonnes lower across the opening three months of 2015 at a shade above 400 million tonnes – equivalent to a decline of 1.8% year on year.

At 71.6%, capacity utilisation in March was four percentage points lower than in the corresponding month of 2014 and 1.8 percentage points down on February this year.

*The full version of Recycling International’s latest ferrous market analysis will appear in its May 2015 issue.