Page 70 from: Recycling International November/December issue 2024
MARKET ANALYSIS
2025: steering into a
year of uncertainty
Volatile scrap prices, EU mills crying foul and
low-cost finished products pouring out of
China are a heady mix as markets head toward
the New Year.
70
manufacturing sector continued to
grapple with persistent headwinds
such as declining household purchas-
ing power, aggressive monetary tight-
ening, and escalating geopolitical
uncertainties. The ongoing weakness
in housing construction, which is driv-
en by tight financing conditions and
high costs, has further contributed to
the sluggish demand for steel.’
In stark contrast, India is expected to
maintain its strong momentum with
robust growth in steel demand pro-
jected for both this year and next.
Projections for India anticipate an
8.0% increase, fuelled by growth
across all steel-consuming sectors and
especially the continued strong growth
in infrastructure investments.
Theuringer quoted worldsteel as being
‘cautiously optimistic’ that global steel
demand will enter a phase of broad-
based moderate growth in 2025. ‘The
key determinants of the global steel
A U T H O R Robin Latchem | P H O T O Shutterstock
Under-performing economies, low
demand within steel-using sectors and
rising exports of low-cost finished
products from China are combining to
make it tough times for ferrous mar-
kets. The impending arrival of Donald
Trump in the White House will add fur-
ther challenges if he carries out his
threat to introduce stiff tariffs on
imports.
Turkish import ferrous scrap prices
experienced swings of volatility in
September and October, with a rapid,
sentiment-driven, rally sparked by a
Chinese stimulus package in late
September followed by a sharp
decline shortly after driven by
European oversupply of ferrous scrap.
Platts, part of S&P Global Commodity
Insights, assessed Turkish bulk imports
of premium heavy melting scrap 1/2
(80:20) at US$ 362 per tonnes CFR on
8 November, down from a high of US$
387.75 on 9 October. Turkish mills
were able to force down prices from
European recyclers, who have been
plagued by a supply overhang due to
weaker European domestic mill
demand for ferrous scrap.
The stimulus announced in late
September by China’s central bank
was its most aggressive package since
the pandemic, with the initial expecta-
tion that it would revive the Chinese
property sector and potentially see a
drop from current near-decade high
steel export volumes, causing a specu-
lative reaction in Turkish scrap prices.
Platts assessed Turkish imports of pre-
mium HMS 1/2 (80:20) at US$ 364.25
per tonne CFR on 25 September,
climbing to US$ 387.75 two weeks
later.
OPTIMISM WANES
However, market optimism that the
announced stimulus package would be
enough to revive Chinese steel
demand began to wane, and the spec-
ulative reaction to the initial announce-
ment cooled when little detail was
given during a briefing on Chinese fis-
cal policy from finance minister Lan
Fo’an in mid-October. Prices then slid
down to a low of US$ 360 per tonne
CFR by 28 October with the market
erasing the gains triggered by the ini-
tial Chinese announcement.
Prices were also driven down by an
oversupply of ferrous scrap in Europe
due to a lack of demand from
European mills in their domestic mar-
kets. This prompted recyclers in the
region to make more material avail-
able to the export market, specifically
to Turkey, as sources reported a lack
of competing alternative export desti-
nations in recent months. At the same
time, the Turkish mills were able to
enjoy strong domestic rebar sales with
a rally in demand from stockists and
traders, with domestic rebar sales pric-
es climbing as high as US$ 660 per
tonne EXW, giving the mills wide profit
margins with scrap prices depressed.
Platts assessed Turkish exported rebar
at US$ 585 per tonne FOB on 8
November, down US$ 5 on the week.
The FOB Turkey rebar assessment
edged down gradually from US$ 600
on 3 October to US$ 590 on 31
October as the Turkish mills largely
focussed on their strong domestic
rebar sales and tried to maintain firm
export offers. As such, Platts assessed
the outright scrap-to-export-rebar
spread at US$ 223 per tonne on 8
November, down slightly from US$
230 on 30 October, which was its
highest level since July 2023, with
the scrap-to-domestic-rebar spread
enjoyed by mills at even wider
levels.
2025 REBOUND?
Before the US election, the World
Steel Association (worldsteel) forecast
that global steel demand this year
would fall for the third year in a row,
down 0.9% but would rebound in
2025. An update of worldsteel’s Short
Range Outlook for 2024 and 2025
expects ‘a broad-based recovery’ in
the world excluding China, with global
demand forecast to rebound by 1.2%
to 1 772 million tonnes (Mt) in 2025.
Martin Theuringer, chair of the world-
steel economics committee and md of
the German Steel Association, says:
‘2024 has been a difficult year for
global steel demand as the global
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70-71-72-73_maferrousadv.indd 70 21-11-2024 08:47
