Page 143 from: May 2008
May 2008 143
m a r k e t a n a l y s i s
Winter Olympics will be held. This will
require many millions of tonnes of
construction steel on top of an already-
huge domestic demand. Domestic
prices are rising fast, resulting in the
fact that sellers of steel can often
achieve higher prices at home than in
the export market.
Chinese scrap imports fell again to a
meagre 450 000 tonnes in January-
February this year – 11.7% below the
total recorded in the same period of
2007. Kazakhstan was the leading
exporter to China, followed by Japan.
According to Chinese statistics, the USA
was China’s fi fth-largest supplier of
scrap over the period with only 58 000
tonnes. However, this fi gure seems
excessively low.
Competing commodities
Pig iron prices have continued on their
upward trend. Indian pig iron for
export has touched US$ 700 per tonne
fob, which is more than 30% above
the February 19 tender fi gure and
equates to US$ 750 cfr South East
Asia and US$ 770-780 cfr Japan or
South Korea. However, the Indian gov-
ernment is expected to ban exports of
pig iron – and maybe iron ore too – or
to increase export taxes signifi cantly in
order to safeguard local deliveries.
Such a move, it is feared, would push
worldwide pig iron prices even higher.
Two tenders for major tonnages of pig
iron have been cancelled.
Brazilian pig was also offered at
US$ 750 per tonne cfr Taiwan but the
South American country’s production
was almost halved in March owing to
heavy rain, fl oods and a scarcity of
charcoal. Brazil even had to postpone
a number of deliveries until Septem-
ber. Logically, this should add further
upward momentum to scrap prices. At
the end of April, Brazil sold two large
cargoes of pig iron to the USA for
delivery in the fourth quarter of this
year at US$ 700 per tonne cfr.
Of the 4.8 million tonnes of HBI
exported in 2007, Europe was the
major importer and accounted for one
third of the total while North America
took 25%, Asia 18% and South Amer-
ica 14%, according to the Hot Briquet-
ted Iron Association (HBIA). The main
exporters were Orinoco of Venezuela
and Lebedinsky of Russia, each of
which supplied 25% of the total. Last
month, the fob South America price of
HBI was around US$ 540 per tonne
but the volumes available for export
were minimal.
China’s ore imports in March reached
an impressive 35.5 million tonnes
although this fi gure was 6.5% lower
than that for February. The country’s
iron ore imports in the fi rst quarter of
2008 were 111 million tonnes –
10.5% below the total for the same
period last year.
Coal values also keep on rising, with
delivered USA prices reaching no
less than US$ 325 per tonne com-
pared to less than half that price just
a year ago. The world’s leading steel-
makers, including those in South
Korea and Japan, have agreed to
2008 increases of more than 200%
for coking coal supplied by major
Australian exporter BHP/Billiton.
Ferrous
Top steelmaking companies in 2007
Company Country Steel production % Change
(x million tonnes) over 2006
Arcelor Mittal Luxembourg 116.4 -1.3
Nippon Steel Japan 34.5 +2.4
JFE Steel Japan 33.8 +6.2
Posco South Korea 32.8 +5
Baosteel China 28.6 +26.9
Tata Steel India 26.5 +10.8
Shagang China 22.9 +56.6
Tangshan China 22.8 +19.4
US Steel USA 20.5 -3.3
Wuhan China 20.2 +46.7
Nucor USA 20 -1.3%
Riva Italy 18 -1.5%
(Source: IISI)
Top 15 ferrous scrap exporters
This graph from the London-based Iron & Steel Statistics Bureau (ISSB)
shows that US exports of ferrous scrap are on a steadily rising curve. In
2007, the nation’s overseas shipments were 19% higher than in 2006
and 28% above their 2005 level.
In contrast, Russian ferrous scrap exports fell dramatically in 2007 – by
20% in relation to the 2006 total and by 36% when compared to the
2005 fi gure. The decline is the result of an increase in the domestic EAF
share from 23% of overall steel production in 2006 to 26.6% in 2007;
this proportion is expected to climb further in the coming years. Russia
remained the world’s second-largest scrap exporter last year but is expec-
ted to relinquish this position in 2008.
Top 15 exporters of ferrous scrap 2006-2007
(x million metric tonnes)
Ferrous Scrap 2007 Rank 2006 Rank % Change
Export over 2006
USA 16.642 1 13.978 1 19
Russia 7.855 2 9.797 2 -20
Germany 7.776 3 8.333 3 -7
Japan 6.449 4 7.654 4 -16
France 5.940 5 6.131 6 -3
United Kingdom 5.857 6 7.428 5 -21
Netherlands 4.193 7 4.736 7 -11
Canada 4.100 8 4.000 8 2
Belgium 3.002 9 2.995 9 0
Romania 1.970 10 1.865 10 6
Kazakhstan 1.704 11 1.800 11 -5
Czech Republic 1.671 12 1.457 12 15
Australia 1.501 13 1.355 13 11
Austria 1.147 14 1.149 15 0
Poland 1.089 15 1.190 14 -8
RI_051_MA_Ferrous.indd 4 14-05-2008 14:02:18
