BIR world mirror Ferrous March 2010

Archiv – BIR | The following article is based on the latest Ferrous World Mirror produced by the BIR world recycling body for the benefit of its members.BIR | The following article is based on the latest Ferrous World Mirror produced by the BIR world recycling body for the benefit of its members.
In general, it is much easier these days to sell steel scrap than to buy it, according to Markus Barg of TSR Recycling in Germany in his EU market report.
EU steelworks consumed an estimated 74 million tonnes of steel scrap last year compared to 111 million tonnes in 2008. Based on January 2010 crude steel production figures, however, steel scrap demand could increase around 15 million tonnes this year as a whole. And owing to harsh winter weather, ’steel scrap is not easy to get these days’, Mr Barg emphasised.
As a result, European prices increased more than Euro 50 per tonne between November 2009 and February 2010. However, substitutes such as HBI and pig iron are currently uncompetitive with European steel scrap – again because of low availability.
BIR Ferrous Division President Christian Rubach of Germany-based Interseroh Hansa Recycling GmbH noted that worldwide steel capacity utilisation reached 72% in January 2010 and appears to be on course for 80%. ’This is good news for our industry even though we must recognise that such production growth is not only a result of rising real steel demand but also a result of restocking to a large extent,’ he said.
In 2010 as a whole, world raw steel production is projected to increase by around 100 million tonnes to exceed output levels in the ’boom’ years, added Blake Kelley of Sims Metal Management. In his review of the US market, Mr Kelley highlighted an improvement in domestic raw steel capacity utilisation – and steel prices – on the back of, notably, customer restocking and higher vehicle production, although demand for construction steels remains at lower levels. Improved demand for scrap coupled with lower, weather-affected collection volumes has boosted prices ’significantly’, serving to divert scrap from export docks to domestic mills.
On another positive point, Mr Kelley observed that steel prices have finally begun to increase in the Mediterranean Basin. In Asia, meanwhile, the majority of steelmakers have implemented significant price increases in a bid to recover higher raw material costs.
Scrap prices in Japan remain firm as a result of increased demand from South Korea and from domestic blast furnace operators who are expecting to run at approaching full capacity over the coming months, according to Hisatoshi Kojo of the Japan-based Metz Group. Japan’s land-delivered H-2 scrap price almost trebled between late-October 2009 and mid-March 2010, not least because reductions in consumer spending and manufacturing activity have constrained flows of material into processors’ yards.
Mr Kojo added that Chinese buyers have been slow to follow the upward trend on the international scrap market after having built stocks ahead of their lunar new year holiday.
Rising steel production in India was reflected in an almost 35% leap in scrap imports to 3.94 million tonnes for the period April 2008-March 2009, with a total of ’well over 3.5 million tonnes’ anticipated for the 12 months to March 2010, noted Ikbal Nathani of the Nathani Group of Companies in India. In the first quarter of 2010, Indian buyers were very active in the market until prices reached some US$ 385-390 per tonne cfr for shredded scrap in containers. Pending an improvement in domestic finished goods prices, most Indian consumers are currently content to substitute imported ferrous scrap for locally-produced sponge iron and heavy melting scrap arising mainly from the ship dismantling industry at Alang, Mr Nathani suggested.
According to Andrey Moiseenko of MAIR in Russia, domestic steel scrap collection volumes tumbled 60% in the first half of last year and 40% for 2010 as a whole. Collections recovered ’very slowly’ such that steel mills entered the winter period with their lowest stock levels in recent years at only 1.5 months’ supply compared to the norm of two to three months. As a result, consumers kept scrap prices at a high level during the first quarter of 2010.
Although collections in Russia will be significantly higher this year, the bulk will be consumed domestically whereas quantities available for export will remain relatively limited.
In the Ukraine, meanwhile, scrap collection volumes declined 10% last year, said Mr Moiseenko. Following the extremely cold winter and heavy snowfalls which dented collection levels in January this year, the domestic scrap market has subsequently achieved a better balance between supply and demand. However, steel industry capacity increases are expected to lead to scrap shortages in the near future.