Page 77 from: May 2005
tonnes HBI and 4.6 million tonnes
DRI. Global production of sponge iron
rose 9.3% in 2004 to 54.1 million
tonnes: in the first quarter of 2005,
world DRI production increased by
more than 11%.
Price increases of 71.5% for iron
ore and of around 90% for fine ores
(Fe content around 62-65%) have
been accepted by most purchasers
except the Chinese – by far the
world’s largest ore importers – who
will have to import over 280 million
tonnes in 2005 compared to 208 mil-
lion tonnes last year. Total ore de-
mand in China will be in the range
of 580 to 600 million tonnes.
But on the free market where
short-term rather than annual con-
tracts come into play, the first crack-
downs have been signalled. India’s
spot iron ore export prices have re-
cently dropped by some US$ 10 per
tonne. Fines prices from India also
fell and are now around US$ 85 cfr
China or even lower.
Sea-borne ore tonnage rose 12% in
2004 to just over 600 million tonnes.
China still has around 35-40 million
tonnes of iron ore in stock at its har-
bours due in part to now-justified
speculation. However, the stock situ-
ation also follows on from still-severe
port congestion caused by the arrival
of too many ships and the lack of rail-
way wagons to ship ore to its final
destinations. Some sea-going vessels
have had to wait up to nine days be-
fore being unloaded, a costly affair in
view of rates of around US$ 70 000
per day for a Capesize ore tanker.
Conclusion
The scrap market is still weak as
the main scrap importing countries
have abstained from the market or
bought only on a hand-to-mouth ba-
sis for April and May. However, there
is room for slight optimism as the gap
between scrap prices and those of pig
and sponge iron is much greater than
normal due to the spectacular rise in
iron ore prices – and consequently
also of pig and sponge iron prices –
and ever-rising energy costs. That
said, high energy costs work to the
detriment of mini-mills given their
huge demand for electricity.
The first signs of Japanese and
US electric arc furnace operators
switching from pig/sponge iron to a
higher scrap input have already
been evident. Therefore, the scrap
market must recover sooner or lat-
er, provided of course that the steel
market does not collapse but instead
manages to maintain its high price
levels.
M A R K E T A N A L Y S I S
110
120
130
140
150
160
170
180
190
200
210
220
230
240
250
260
234.17
195.83
158.17
162.50
224.17
225.83
197.35 200.50
242.33
252.83
249.17
209.50
195.33
193.17
214.50
Apr AprMarFebDec JanMay 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
Apr AprMarFebDec JanMay JulJun Aug Sep NovOct
255
270
255 255
270
230 230 230 230
235
255
205 205
200 200 200
230
250
220
235
215
165
185
145
170
205
130
120
140
150
160
170
180
190
200
210
220
230
240
250
260
270
Highest price
Lowest price
235
225
225
240
265
210 210
205 205 205
250
200 200 200 200
195
220
235
240
250
205
160 170
175
150
200
Apr AprMarFebDec JanJunMay Jul Aug Sep NovOct
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
Apr AprMarFebDec JanJunMay Jul Aug Sep NovOct
271.8
270.8
253.4
244.6
239.6
207.4
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 Domestic Scrap Prices (US$/GRT)
HMS 1 heavy steel scrap (1/4 Inch)
composite price delivered at mills
(Reference date: April 30, 2005) Ferrous Scrap Prices
Recycling International • May 2005 77
