Page 56 from: March 2014

56 March 2014

m a r k e t a n a l y s i s

Ferrous

‘No reason to expect miracles’
in 2014, says Rubach
The scale of the ferrous scrap price decline in February
came as a surprise to many in the international trading
community. But with mill buyers in Turkey generally
preferring to keep their wallets in their pockets, there
could be more price pain to come in March. Latest
cfr price indications for shipments from Europe to
Turkey are: US$ 340-345 per tonne for standard
quality HMS I/II 80/20 scrap; US$ 345-350 per
tonne for shredded; and US$ 320-325 per tonne
for the HMS I/II 70/30 mix.

Closed: March 3 2014

During the course of February, Turkish mills were highly effec-
tive in applying downward pressure on
international scrap prices – to the

extent that values in early March are at
least US$ 40 per tonne below the
range of US$ 385-390 for standard
quality HMS I/II 80/20 scrap that head-

lined our previous report of late January.
Buying enthusiasm was choked largely
by a combination of poor demand for
the mills’ finished products and by the
continuing weakness of the Turkish lira
in relation to the US dollar. As
explained previously, this exchange
rate is particularly important as Turkey’s
steel producers purchase their scrap in
US dollars from the international mar-
ket but are paid for their domestically-
sold products in lira.
In the first full week of February, US
exporters were still commanding
around US$ 370 per tonne cfr for the
HMS I/II 80/20 grade and US$ 375 for
shredded scrap. But subsequent sales
into Turkey, from the USA and also
northern Europe, served to push the
market lower – with another US$ 10-15
per tonne lost before the middle of
February and further erosion witnessed
in the second half of the month.
Deep-sea bookings were few and far
between as calendars were flipped from
February to March, with European sup-
pliers to the Turkish market obtaining as
little as US$ 340 per tonne for their HMS
I/II 80/20 scrap and their US counter-
parts nearer US$ 350 on a cfr basis.
Meanwhile, A3 scrap from the Black Sea

region was fetching typically between
US$ 330 and US$ 340 per tonne.

Little incentive to collect
The weather has remained a dominant
topic in the USA, with disruption to the
road, rail and barge network continu-
ing to impact scrap deliveries to the
mills since our previous report.
Although conditions are better than
they were earlier in the year, the situa-
tion has yet to return to normal. Mean-
while, the fall in scrap prices has pro-
vided little incentive for collectors to
step up their activities.
Although negotiations were still taking
place at the time of writing, most
experts are predicting a drop in US
domestic scrap prices of between
US$ 10-20 per tonne for March – and
some are even forecasting that the
decline could extend to US$ 30.
Elsewhere, leading Japanese steel-
maker and domestic scrap price bench-
marker Tokyo Steel has confirmed that,
for March, its finished product selling
prices will remain unchanged for the
second consecutive month. However,
the same cannot be said for its scrap
supplies: in the opening two months of
the year, the company dropped pay-

International trading suffers in 2013
Last year was characterised by a sharp decline in global external trading of
steel scrap as well as by its generally lower usage in steel production. These
are the major findings of the latest ‘World steel recycling in figures’ update
compiled by Rolf Willeke, statistics advisor to the BIR world recycling organ-
isation’s Ferrous Division.
For most countries, he notes, percentage reductions in the scrap used in steelmak-
ing were greater than the respective declines in crude steel production. Examples
given for last year’s January-September period are: the EU-27 (where steel scrap
consumption dropped 6.9% to 67.2 million tonnes); the USA (-7.8% to 39.2
million tonnes), Turkey (-7.3% to 22.9 million tonnes); and Russia (-10.4% to
13.98 million tonnes). Even in China, where scrap consumption climbed 2.7%
to 64.3 million tonnes in the first nine months of 2013, domestic crude steel
output made a far steeper gain of 8% when compared to the first three quarters
of 2012. ‘It is noticeable that, for steelmaking, China is using more domestical-
ly-supplied steel scrap and reducing its imports,’ Willeke points out.
Meanwhile, figures for the period up to and including November 2013 empha-
sise the clear downtrend last year in the global external steel scrap trade.
Among the leading exporters to witness a year-on-year decline in their over-
seas shipments were the USA (-14.5% to 16.9 million tonnes), the EU-27
(-16.1% to 15.3 million tonnes) and Japan (-1.1% to 7.6 million tonnes) while
many top importers bought in lower volumes from abroad, notably Turkey
(-13.5% to 17.8 million tonnes), the Republic of Korea (-11.8% to 8.4 million
tonnes) and, as indicated above, China (-7.3% to 4.2 million tonnes).

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