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Argentina ‘insulated’ by scrap export ban extension

Argentina – The Argentinian government’€™s decision to extend the existing ban on ferrous scrap exports by a year has reaped mixed industry views.

Contrary to criticism from the ferrous sector, Argentina’€™s industrial foundry chamber Cifra has declared the continued export ban to be a positive factor for the country’€™s economy. ‘€˜Scrap sellers were establishing low prices to stimulate exports to the detriment of internal supply,’€™ it claimed. The domestic sector is under pressure, it says, owing to an annual scrap consumption increase averaging 5-6%.

The Argentinian government has reacted to the debate, stating that the recent ban extension is meant mainly to shield domestic steelmakers. The legislators reason: ‘€˜The steel industry cannot afford to lose these inputs.’€™ Untrue, claim local scrap dealers, who believe the move will ‘€˜further insulate’€™ the nation’€™s market from foreign investors.

An executive from a Brazilian steelmaker has told Platts’€™ Steel Business Briefing that Argentina’€™s scrap players are, in essence, ‘€˜being held hostage by the situation’€™. He added that, during the week in which the latest extension was put into effect, the country witnessed a notable drop in prices of both iron ore and natural gas, making blast furnace production cheaper. ‘€˜Scrap prices also went down by about 100-150 Argentinian pesos per tonne (US$ 20-30),’€™ noted the steelmaker.

Source: Platts

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