‘Amazing’ time for ferrous traders

Sustained demand and substantially higher prices for scrap export during the final weeks of 2020 meant a bright New Year for traders.

The cost of shipments of HMS 80/20 heavy steel scrap from northern Europe to Turkey soared from around US$ 293 per tonne in November to US$ 399 in December and then hit US$ 432 early in early January before easing off later in the month.

US scrap had been particularly strong by the year-end with the Bureau of Labor Statistics showing iron and steel scrap prices rising 31.3% in December, year-on-year to December 2019, and up 25.8% on the month before, the highest monthly increase of 2020.

Order books for most steel producers were generally full at the start of the year and that had the knock-on effect of boosting ferrous scrap prices for the third consecutive month. In the US, rates rose around US$ 100 per tonne because of decent demand and fewer supply challenges.

Earlier in the month, as reported by Recycling International, contributors to the first BIR Challenge event in mid-January spoke of ‘an amazing 60 days’ for ferrous prices during which scrap prices from US sources had risen 60-70%.

Meanwhile, the latest short-term outlook from the International Rebar Producers Association (IREPAS) suggests supply remains on the short side in the global long steel products market and this situation will probably not change until the second quarter.

‘Chinese demand for raw materials and semi-finished products has been providing the main boost to the markets,’ IREPAS states. The outlook is encouraging for the scrap trade: ‘It seems that everything is evolving around scrap, which looks like being a leading focal point in the coming years, which may lead more Chinese capital into the scrap business.’

2020 crude steel production

Latest data from the World Steel Association (worldsteel) shows global crude steel production was 1 864.0 million tonnes in 2020, down 0.9% compared to 2019. Asia produced 1 374.9 million tonnes of the overall total, an increase of 1.5%.

The bulk was obviously from China, whose total of 1 053.0 million tonnes indicates a rise of 5.2%, increasing its share of global production from 53.3% in 2019 to 56.5% in 2020. On the other hand, India’s crude steel production last year fell 10.6%. Japan’s was down 16.2% and South Korea’s fell 6.0%.

The EU total of 138.8 million tonnes was down 11.8% on 2019 while North America fell 15.5% with the United States contributing 72.7 million tonnes, down 17.2%.

Those reporting increased production include Turkey (up 6% to 35.8 million tonnes), the Middle East (up 2.5% to 45.4 million tonnes), the CIS (up 1.5% to 102.0 million tonnes) and Iran (up 13.4% to 29.0 million tonnes).