Global – Despite the fact that significant international sales of ferrous scrap have been made over recent weeks, notably into Turkey, prices have failed to reverse the downward trend that became established in September, with further reductions widely anticipated for the current month.
Latest cfr price indications for shipments from Europe to Turkey are US$ 315-320 per tonne for standard quality HMS I/II 80/20 scrap and US$ 320-325 for shredded.
After several months of ferrous scrap prices holding up while iron ore plumbed new depths, the apparent disconnect between the values of these two raw materials is now ‘well and truly at an end’, delegates to the late-October BIR Ferrous Division meeting in Paris were told by Tom Bird, outgoing president of the European Ferrous Recovery and Recycling Federation (EFR).
However, he went on to suggest that steel scrap prices are perhaps ‘not far from the bottom’ and that ‘we may well see a slight rebound towards the end of the final quarter’. Early-October brought a false dawn for iron ore prices. Metal Bulletin’s 62% Fe iron ore index climbed briefly above US$ 84 per tonne but has subsequently retreated to below US$ 77.
Meanwhile, latest crude steel production figures are providing hard evidence of a widespread slippage in industrial momentum. In September, the 65 countries reporting to the World Steel Association (WSA) suffered a decline in their cumulative output when compared to the same month last year – albeit of a mere 0.1% or 88 000 tonnes to 134.421 million tonnes.
Even China failed to beat its September 2013 total, matching its performance of 12 months earlier with an output of 67.54 million tonnes. The WSA has downgraded its consumption growth forecasts for this year and next in the face of ‘a weaker-than-expected performance in the emerging and developing economies’.
It expects global apparent steel use to increase by 2% to 1.562 billion tonnes in 2014 and by the same percentage next year to 1.594 billion tonnes – significantly below its growth predictions issued in April of 3.1% for 2014 and 3.3% for 2015.
The full ferrous market report will appear in Recycling International’s November 2014 issue.