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Ferrous scrap still under-valued?

Global – Despite the fact that ferrous scrap has registered substantial price gains in the fourth quarter, some experts are still claiming that the commodity is significantly under-valued when viewed in relation to coking coal and iron ore. Latest cfr price indications for shipments from Europe to Turkey are US$ 260-265 per tonne for standard quality HMS I/II 80/20 scrap and US$ 265-270 for shredded.

The recent recovery in ferrous scrap values has been fuelled in large part by steep increases in coking coal and iron ore; spot prices for premium hard coking coal, for example, surged beyond US$ 300 per tonne in early November and are still around this threshold as month-end approaches. The fall-out from these developments has included greater use of scrap by basic oxygen furnace operators and, therefore, some eye-catching trade flows. For example, several bulk cargoes of scrap were booked by China from the US west coast in the first half of November.

In the early stages of this year, Metal Bulletin’s 62% Fe iron ore index tumbled below US$ 40 per tonne but it is currently hovering around the US$ 80 mark for the second time this month.

*The full version of Recycling International’s latest ferrous market report will appear in its December issue.

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