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Ferrous scrap stalls as lira weakens

Global – The weakness of Turkey’s currency in relation to the US dollar has had a significant adverse impact on steel scrap buying activity, notes Recycling International in its latest ferrous scrap market report*.

This is because Turkey’s mills buy scrap off the international market in US dollars but receive payments for their domestically-sold products in lira. These producers have also been affected by more sluggish demand both at home and abroad for their finished goods. Some have therefore opted either to trim production or to look to source scrap more cheaply from smaller supplier countries.

Latest cfr price indications for shipments from Europe to Turkey are: US$ 385-390 per tonne for standard quality HMS I/II 80/20 scrap; US$ 390-395 per tonne for shredded; and US$ 365-370 per tonne for the HMS I/II 70/30 mix. In the USA, domestic ferrous scrap prices have made further gains in January of US$ 10-20 per tonne depending on the grade and location, but many mills appear to be banking on a drop in prices for February.

Meanwhile, the World Steel Association has reported a global crude steel production record of 1.607 billion tonnes for 2013 – an increase of 3.5% over the 1.553 billion tonnes of the previous year. China topped the world producer league on around 779 million tonnes for a year-on-year increase of 7.5%.

*The full ferrous market analysis will appear in the January/February 2014 issue of Recycling International.

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