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BIR Ferrous World Mirror January 2015

Global – The following article is based on the latest Ferrous World Mirror produced by the BIR world recycling organisation for the benefit of its members.

Whereas imports into China have continued to dwindle, usage of steel scrap in domestic crude steel production is still charting an upward course, according to the latest ′World steel recycling in figures update′ from the BIR world recycling organisation′s Ferrous Division. When compared to January-September 2013, the country′s domestic scrap consumption climbed 4.8% to 67.4 million tonnes in the opening nine months of last year whereas imports plummeted 43.4% to 1.962 million tonnes – again underlining ′the country′s policy of buying more steel scrap from domestic sources and of reducing imports′, explains divisional statistics advisor Rolf Willeke.

When comparing the same two periods, Malaysia also recorded a substantial reduction in overseas steel scrap purchases of 49.8% to 824 000 tonnes. Other countries to register significantly lower import totals included South Korea (-7.1% to 6.433 million tonnes), India (-15.4% to 4.06 million tonnes), Taiwan (-5.7% to 3.177 million tonnes) and Indonesia (-20.4% to 1.51 million tonnes).

In contrast, the world′s foremost steel scrap importer Turkey upped its overseas purchases in January-September last year, albeit by a slender 0.2% to 14.68 million tonnes, whereas imports into Thailand soared 66.7% to 1.06 million tonnes. The EU-28 remained the world′s leading steel scrap exporter with a 3.9% increase to 13.018 million tonnes while the USA saw its exports plummet 19.4% to 11.588 million tonnes thanks largely to reductions of 32.8% to Turkey, 19.6% to South Korea, 13.5% to Taiwan and 58.5% to China.

Steel scrap exports from Japan slid 14.3% to 5.576 million tonnes in the first three quarters of last year on the back of sharp declines in its shipments to South Korea (-17.6%) and to China (-22.4%); however, its deliveries increased markedly to Vietnam (+47.2%) and Taiwan (+9.4%). A 20.6% drop-off in overseas shipments from South Africa to 1.112 million tonnes is attributed largely to a 23.2% reduction in India′s purchases from this source.

Elsewhere, steel scrap export increases were recorded in January-September 2014 by Russia (+72.6% to 4.286 million tonnes) and Australia (+6.7% to 1.677 million tonnes). In latest national and regional market reports, the recent flurry of purchases from Turkey is said to have pushed up the price of 80/20 scrap from the EU to US$ 315-plus per tonne.

However, the market has been much quieter since mid-January, partly because of the renewed availability of material from traditional Eastern European shippers following the holiday period. The EU short-sea market also witnessed a slight increase in activity during early January but prices into Spain have subsequently returned to pre-Christmas holiday levels.

Although the first quarter is expected to remain ′challenging′ for EU scrap businesses, it is believed the ongoing steadiness of steel scrap demand in the Eastern Mediterranean should preserve a market floor. In the USA, meanwhile, domestic steel scrap demand has remained largely ′robust′ but abundant availability has impacted prices.

Figures from India show that its ferrous scrap imports climbed to 3.1 million tonnes in the seven months to October 31 last year, representing good growth over the previous year but still well short of 2012/13 import levels. Scrap industry experts have expressed the hope that the government will roll back the basic import duty on ferrous scrap from 2.5% to 0% in its late-February budget.

Market-wise, a few deep-sea scrap cargoes were sold to Indian traders in December but, following a further downturn, the material has since been offered in the domestic market ′at attractive price levels′. Scrap demand in Japan is expected to be firm and no sharp price drops are anticipated from current levels. Unusually, domestic scrap values have been higher in the east of the country than in the west.

With Japan′s leading scrap customer South Korea set to enforce higher radioactive contamination inspection standards from March 1 this year, offers from Korean mills have increased on concerns that some exporters may not be able to meet the new requirements. The majority of steel mills in Russia were able to prepare winter scrap stocks in time and so have not been too active in the market of late.

In the event, the weather has been quite warm in most regions and so scrap shipments and collections have been largely unaffected. A recent price increase of 300-500 rubles per tonne meant just a slight adjustment for US dollar-based export prices. The weak ruble provided Russia′s steel scrap exporters with healthy margins during the fourth quarter of 2014 but volumes did not increase significantly owing to logistics issues, especially in the Azov Sea region.

Last year, steel scrap collections in Ukraine were broadly the same as in 2013 at 6 million tonnes whereas exports surged from 250 000 tonnes to 850 000 tonnes as a result of the shutting down of some steel mills in the eastern part of the country as well as the distribution of new export quotas. Here too, scrap exporters were able to take advantage of a weak local currency.

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