Lower steel prices prompt ferrous mood swing

Global – The first-quarter rally in ferrous scrap prices proved to be short-lived. Although more difficult to assess because of the recent dearth of trades, 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 world’s crude steel production climbed 5.7% in the opening quarter of 2017 – equivalent to an increase of more than 22 million tonnes over January-March 2016.

But sentiment since then has been altered by dwindling prices not only for finished steel but also for key steelmaking raw materials such as iron ore.

Having soared to around US$ 92 per tonne in mid-March, Metal Bulletin’s 62% Fe iron ore index tumbled to US$ 63 in the penultimate week of April, although it has since made small gains.

As for the effects of this mood swing on ferrous scrap, Turkey was paying more than US$ 300 per tonne for some its supplies in early March. The country’s mills booked well over 300 000 tonnes of scrap from deep-sea suppliers in little more than a week around the turn of the quarter but weaker demand for finished steel has since served to dent trading activity and prices.

The full version of Recycling International’s latest ferrous market report will appear in its No. 3/2017 issue.