Page 35 from: January / February 2005
tonnes; it is thought the export sur-
plus may remain stable at 5.7 mil-
lion tonnes.
Capacity utilisation in Germany
was 98% last year. However, there
is some concern among steel mills
that long steel may be in over-sup-
ply. It should not be forgetten that
construction steel accounts for the
majority of China’s dramatic steel
output growth of the last two years.
Conclusion
The boom in scrap prices wit-
nessed in the second and third quar-
ters of 2004 may be over but, given
the continuing high prices of com-
peting commodities, scrap levels are
unlikely to fall below US$ 200 fob in
the near future – a price base that
would have seemed like a utopia just
a couple of years ago!
For Europe and the US East
Coast, scrap export prices are
expected to hover in the range
US$ 210-240 fob in this and the sec-
ond quarter, depending on quality.
The price may be sustained by in-
creases in the values of iron ore and
coking coal, and hence pig and
sponge iron, and by ever-growing
worldwide steel production.
M A R K E T A N A L Y S I S
Recycling International • January/February 2005 35
110
120
130
140
150
160
170
180
190
200
210
220
230
240
250
260
186.67
228.67
244.83
234.17
195.83
158.17
162.50
224.17
225.83
197.35 200.50
242.33
252.83
249.17
209.50
AprMarFeb DecJan May JulJun Aug Sep NovOct
Fob West
Coast price
Fob East
Coast price
270
120
130
140
150
160
170
180
190
200
210
220
230
240
250
260
AprMarFeb DecJan May JulJun Aug Sep NovOct
225
250
255
270
255 255
270
230 230
255
205 205
235
265
230
230
250
220
235
215
165
185
145
170
205
220
130
120
140
150
160
170
180
190
200
210
220
230
240
250
260
270
Highest price
Lowest price
230
235
260
225
255
225
225
225
240
265
210 210
250
200 200
220
235
240
250
205
160 170
175
150
200
220
AprMarFeb DecJan JunMay Jul Aug Sep NovOct
143,2
157
178
205.3
197.4
182.5
257.4
257.1
154.6
184.3
130
140
150
160
170
180
190
200
210
220
230
240
250
260
270
280
AprMarFebDec DecJan JunMay Jul Aug Sep NovOct
271.8
270.8
253.4
USA Export Prices (US$/GRT)
HMS 1, heavy steel scrap (1/4 Inch)
Fob Rotterdam Export Prices (US$/t)
HMS 1, heavy steel scrap (1/4 Inch)
* Average German Scrap Prices (€/t)
S2 / E2, steel scrap (3 mm) Delivered at mills
USA Scrap Prices (US$/GRT)
HMS 1 heavy steel scrap (1/4 Inch)
composite price delivered at mills
Ferrous Scrap Prices (Reference date: December 31, 2004)
Currency still a dominant factor
As long as metals, scrap prices and shipping freight rates continue to
be quoted in US dollars, the scrap market will remain volatile and non-
transparent. It seems inevitable that quotations will ultimately switch
to Euros; however, a key stumbling block is that the USA remains the
world’s largest exporter of ferrous, non-ferrous and alloy scrap, and also
of paper stock. Furthermore, the largest individual importer of these
commodities, China, has its currency pegged to the US dollar.
When the international currency exchanges opened on January 3,
the following rounded-off exchange rates applied:
€/US$: 1.35 €/£: 0.71 £/US$: 1.90 Yen/US$: 0.007
US$/€: 0.74 £/€: 1.41 US$/£: 0.52 US$/Yen: 102.7
