Page 79 from: March 2013
79March 2013
Ferrous
Ferrous Scrap Prices Reference date: March 5, 2013
F M A M J J A S O N D J F F M A M J J A S O N D J F
F M A M J J A S O N D J F F M A M J J A S O N D J F
HMS 1 heavy steel scrap (1/4 Inch) composite price delivered at mills
USA Domestic Scrap Prices (US$/GRT)
HMS 80/20 heavy steel scrap
Fob Rotterdam Export Prices (US$/t)
400
450
500
550
350
350
400
450
500
300
HMS 1, heavy steel scrap (1/4 Inch)
USA Export Prices (US$/GRT)
400
450
500
550
350
S2 / E2, steel scrap (3 mm) Delivered at mills
Average German Scrap Prices (e/t)
300
350
400
450
250
345
324
314
310
285
325
310
320
295
285 289 285
420
425 425 425
420 420
320
370
330
365
380
380
345
340
385
325
380
320
385
390390
385
410
400
405
340
325
370
350
345
355
350
360
355
410
425
415
430
415
350
365
420
355
365
335
370
340
370
375
360
365
350
360
370
365
370
365
375
380
370
– Fob East Coast price
– Fob West Coast price
– Highest price
– Lowest price
56% to US$ 26 million as meaningful
improvements in both ferrous and non-
ferrous metal spreads more than offset
decreased volumes,’ he said. ‘Increased
copper margins provided the most
notable improvement, as global copper
prices increased based in part on
improved demand from China. We also
took advantage of a strong December
ferrous market environment, increasing
our expected shipments.’
The company’s steel mill capacity utili-
sation improved to 80% in the fourth
quarter from 78% in the previous three
months, while shipments increased
4%. ‘The average selling price per ton
shipped decreased US$ 25 to US$ 784
in the fourth quarter, and the average
ferrous scrap cost per ton melted
decreased US$ 9 per ton,’ the com-
pany explains. For 2012 as a whole,
average scrap cost per ton melted
dropped US$ 32.
The importance of the scrap supply issue
was underlined by Sims Metal Manage-
ment’s group ceo Daniel W. Dienst in
announcing latest financial results.
‘While we are beginning to see improv-
ing economic fundamentals in our key
scrap generating market in the United
States,’ he said, ‘the translation into
stronger scrap volumes remains cur-
rently challenged as scrap generation
typically lags the fundamentals. Sub-
dued scrap generation, particularly
within the consumer segment, nega-
tively impacted sales and margins in the
first half (of the current financial year),
which was compounded by weaker
commodity prices and periods of tepid
ferrous scrap demand.’ Weak scrap gen-
eration and tight margins contributed
to a performance for the group’s Euro-
pean business which Dienst described
as ‘an obvious disappointment’.
Outlook
The first quarter of 2013 has offered a
compelling example of how the bal-
ance of power can shift in scrap buying
and selling circles. Following gains in
the very early part of the year, our pre-
vious report reflected a subsequent
swing of the pendulum to the buyer’s
side. In early March, by contrast, most
of the scrap price talk appears to be to
the upside as material remains scarce
and mills’ stocks in some key parts of
the world are deemed to be lower than
they would like.
RI_2-MA-Ferrous.indd 79 06-03-13 09:30
