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BIR Ferrous World Mirror October 2013

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.

Not least as a result of the ‘highly volatile’ rupee, ferrous scrap imports into India were slashed to 1.3 million tonnes in this year’s April-June quarter after having totalled 6.9 million tonnes in the previous 12 months – equivalent to a decline of almost 25% on an annualised basis. In addition to currency concerns, the country’s scrap consumers are also faced with ‘import duties on scrap, poor domestic demand for finished steel and a slugging economy overall’.

Elsewhere in Asia, China bought several deep-sea cargoes of shredded scrap over a month ago ‘but has been quiet since then’. Taiwan has discontinued its deep-sea scrap buying in recent weeks but containerised purchases ‘continue to be active’. Buyers in Malaysia and Vietnam have been reasonably prominent, but those in Thailand and Indonesia have been showing little interest.

In Japan, meanwhile, mills have been struggling to reflect all scrap price increases in their own finished product values. Current trade opinion in the USA expects October pricing to be ‘sideways or lower’.

Across in Europe, the market is said to be ‘following the familiar pattern of small peaks and troughs seen over the last 18 months or so’. For Europe’s scrap operators, competition for raw material remains fierce, with volumes reportedly 50% below the norm in some areas. However, any scrap price reductions in October ‘may be short-lived’, it is believed, and the general outlook is for an improvement in the final quarter.

In Russia, the larger scrap operators appear to have accumulated winter stock already ‘and so no increase in demand is expected in the coming months’. Meanwhile, the country’s export duties on scrap are scheduled to be cut by 2.5% from October 3 as part of its World Trade Organization commitments.

Meanwhile, domestic stocks of scrap were so low in September that some mills in Ukraine had ‘only enough for a few days of operation’, prompting them to raise their prices by US$ 12 per tonne in order to attract more material.

Based on an extrapolation of eight months of World Steel Association data, the world is on course to produce 67 million tonnes more raw steel and 55 million tonnes more iron in 2013 when compared to 2012, while apparent consumption of purchased scrap is on track to increase by 12 million tonnes.

According to the latest ‘World Steel Recycling in Figures’ update from the BIR Ferrous Division, China’s usage of steel scrap in its production of crude steel jumped 5.1% to 43.4 million tonnes in the first half of this year although its imports fell 8.5% to 2.56 million tonnes. Also, steel scrap consumption in South Korea climbed 1.5% to 16.6 million tonnes in January-June this year despite a 5.3% drop in the country’s crude steel production.

Generally, however, the opening half-year of 2013 saw reductions in steel scrap usage across most of the leading consuming nations. The 7.8% decline in the EU-27 gave a total of 46.1 million tonnes while the USA reported a drop of 8.7% to 26.1 million tonnes. Consumption ebbed too in Turkey (-7.9% to 15.1 million tonnes), Russia (-12.9% to 8.3 million tonnes) and Japan (-2% to 18.6 million tonnes), although Japanese crude steel production actually climbed 1.2% over the same period.

Exporters were particularly hard hit by the steel scrap consumption decline in Turkey as the world’s leading importer slashed its overseas purchases by 18.2% in January-June this year to 9.273 million tonnes. But India’s imports tumbled by an even more dramatic 19.4% to 3.457 million tonnes.

The USA easily maintained its position as the world’s leading exporter of steel scrap despite its overseas shipments dropping 12% to 9.922 million tonnes in the first half of 2013. EU exports fell even more sharply – by 21.5% to 8.145 million tonnes.

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