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Conflict dominates market uncertainty

Our market reports typically reflect a wide range of issues affecting the ferrous markets and the efforts of recyclers to supply them. This time, just two dominate – the war in Ukraine and rising inflation levels. Most eyes, though, are on Ukraine.

As BIR president Tom Bird put it in the world recycling organisation’s latest annual report, ‘The world is yet again facing another dramatic challenge which affects many of our members directly and which shocks all of us to the core. All other problems and issues seem insignificant in comparison.’

Separately, the latest World Economic Outlook report says the conflict and rising inflation levels have prompted significant downward revisions to the IMF’s global economic projections for 2022 and 2023. World growth in both this year and next is now projected to be 3.6%, down 0.8 and 0.2 percentage points, respectively, from its January forecast. Global growth in 2021, as economies recovered from the Covid pandemic, was 6.1%.

Lull in Turkish imports

A key bellwether in the ferrous export market is activity into Turkey. Reports of trade in heavy steel scrap suggest business is very quiet with weak finished long steel sales. However, the few deals being done reflect higher prices, up from just under US$ 500 per tonne in January to well over US$ 600 per tonne in February and March.

Meanwhile, steel producers have been adapting to the enforced changes to the market with ArcelorMittal reported to have eliminated Russian commodities from its supply chain. According to Bloomberg, the steel giant said it previously sourced about a fifth of the coal for its European mills from Russia and was halting the flow. 

In brighter news from Ukraine, a report in the Wall Street Journal on 12 April indicated that the domestic steel industry was taking tentative steps to resume production. ArcelorMittal said its giant plant in Kryvyi Rih would restart one of its three furnaces while the Ukrainian company Metinvest said its joint venture with Zaporizhstal would resume production at two of its four blast furnaces. It was not expected that any exports would result.

According to worldsteel, Metinvest produced nine million tonnes of crude steel in 2021, making it Europe’s third-largest producer. Argus Media reports the benchmark cost of hot-rolled coil in northern Europe soared 43% from EUR 943.75 per tonne in late February to EUR 1 348.50 in mid-April.

Read the full market analysis in our upcoming issue >>

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