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Cheap Chinese billet remains a key factor

Global – Amid fluctuations, international ferrous scrap prices ended August slightly below the levels at which they started the month. Latest cfr price indications for shipments from Europe to Turkey were US$ 215-220 per tonne for standard quality HMS I/II 80/20 scrap and US$ 220-225 for shredded material.

For scrap sales into Turkey, the price peak for August of US$ 240 per tonne for the HMS I/II 80/20 mix was achieved in the penultimate week of the month by an American supplier. Subsequently, however, Turkish mill buyers took their foot off the scrap-purchasing pedal and prices duly declined.

A key factor in recent market developments has been the continuing willingness of Chinese suppliers to offer billet into the Turkish market at ‘sharpened pencil’ prices of, latterly, around US$ 320 per tonne cfr. Many other markets too have been a target for China’s low-priced billet.

Meanwhile, most of the world’s leading steelmaking nations made a decidedly slower start to the second half of 2015, resulting in a year-on-year fall in global crude steel output of 3.8% in July to 132.9 million tonnes, according to latest figures released by the World Steel Association.

Capacity utilisation among the 65 reporting countries averaged just 68.4%, which is equivalent to a decline of 4.2 percentage points over July last year and of 3.8 percentage points over June 2015. Most notably, China’s production slid 4.6% to 65.84 million tonnes this July although more recent figures suggest its output bounced back in early August.

The full version of Recycling International’s latest ferrous market analysis will appear in its September 2015 issue.

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