The volume of US material among all Turkish ferrous scrap imports was 20.3% in August, up from the average of 17.6% seen in the first half of the year. ‘Movements show that US scrap market prices remain largely dependent on Turkey,’ says Fastmarkets metals analyst Lee Allen.
America’s high-consumption scrap markets still rely on exports (almost 18%) and US President Trump’s widely discussed Section 232 tariff measures have done little to change that, Allen told delegates at the London gathering of the Bureau of International Recycling (BIR). Despite political and economic pressure with the lira losing nearly 40% of its value in 2018, Turkey’s reliance on US scrap imports has gradually increased over the last couple of months.
‘Indeed, the strong mutual dependence between the US and Turkey is a critical factor in today’s ferrous scrap market,’ Lee said. The UK, however, had reacted ‘most violently’ to the Turkish downturn, with scrap exporters trying to diversify their customer base. On the whole, Lee expects ‘tighter’ collection rates and the EU’s safeguarding tariff to raise scrap prices at the start of 2019.
George Adams of SA Recycling observed: ‘US export prices, although up, appear to be levelling and should provide some comfort in the short term’. He believes domestic demand and decreased supplies could push up domestic scrap prices this month. ‘Demand remains strong as the mill capacity utilisation rate hovers in the 80% range and many electric arc furnace mills are running closer to 90%,’ Adams stated.
Meanwhile, Turkey’s overseas steel scrap purchases surged by more than 15% to 10.771 million tonnes in the first six months of this year, reported Rolf Willeke, statistics advisor of BIR’s ferrous division. This performance reinforced its position as the world’s leading importer of steel.
The EU-28 remains the biggest steel scrap exporter, Willeke added, and outbound shipments in the first half of 2018 rose by 7% to 10.714 million tonnes. There was also a surge of 105% in steel scrap used for crude steel production in China during the first half of 2018. The total stood at 127.6 million tonnes produced, compared to 62.2 million tonnes during the same period last year.
The full BIR report will be published in the next issue of Recycling International, #6. Stay tuned for further updates!
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