Page 49 from: September 2015
49September 2015
Ferrous
far between over recent weeks.
Meanwhile, latest figures covering
the first half of this year reveal that,
despite an 11% increase in shipments
to main overseas buyer Turkey, total
US ferrous scrap exports fell more
than 817 000 tonnes year on year to
6.306 million tonnes. Key to the over-
all decline was a drop-off in US
exports to South Korea and Taiwan,
with shipments to the former slump-
ing 49% from 834 400 tonnes in
January-June 2014 to 429 365 tonnes
in the corresponding period of this
year while deliveries to the latter slid
17% from 1.327 million tonnes to a
shade under 1.1 million tonnes,
according to stats from the US Census
Bureau and the US International
Trade Commission. US shipments to
Canada and China also declined – by
34% and 10%, respectively.
Among the plus points for US export-
ers, Mexico increased its US scrap
purchases by 26% to 446 344 tonnes
while Thailand’s demand surged
137% from 117 757 tonnes to
279 564 tonnes. The 11% upturn in
US shipments to Turkey took the total
for the first half of 2015 to 1.963 mil-
lion tonnes versus the 1.775 million
tonnes of January-June 2014.
Sketchy demand
Also in the first half of 2015, there
was an 84% spike in US ferrous scrap
sales to India – from 247 330 tonnes
in the opening six months of last year
to 456 045 tonnes this time around.
In August, however, reports suggest
demand from India for US scrap has
been sketchy at best, with HMS I/II
80/20 attracting little more than
US$ 200 per tonne whereas shredded
sales have occupied the US$ 230-240
range of late.
As contended in the most recent Mir-
ror publication from the BIR world
recycling organisation, which covered
the stainless steel market, recent
changes to India’s pre-shipment
inspection rules have resulted in
‘chaos’. As ‘self-declared’ material
must be properly controlled on arrival
at port, and as there are very limited
resources made available for this, con-
tainer loads ‘are simply being thrown
into intolerable periods of deten-
tion’. In order to avoid the associated
additional costs and losses, therefore,
most Indian buyers will only accept
material which is accompanied by a
pre-shipment inspection certificate
issued under the new rules dating
from July 1 this year, it is suggested.
Competing commodities
After some tempestuous times of
late, iron ore prices have been a rela-
tive ocean of calm for most of August.
The Metal Bulletin 62% Fe iron ore
index was camped almost exclusively
in US$ 55-56 per tonne territory,
although the US$ 57 threshold was
broached around the middle of the
month. However, yet more discourag-
ing data from China prompted a
decline during the final week of the
month to approaching US$ 54 per
tonne at the time of writing.
China’s iron ore imports nudged
close to an all-time record this July in
climbing 4% year on year to 86.1 mil-
lion tonnes, customs data have
revealed. The total compares to:
82.52 million tonnes in the same
month last year; just short of 75 mil-
lion tonnes in June 2015; and the
peak of 86.9 million tonnes recorded
in December 2014. Chinese ports
received a total of 539 million tonnes
of iron ore in the first seven months
of this year, virtually the same as in
January-July 2014.
Steel
Most of the world’s leading steelmak-
ing nations made a decidedly slower
start to the second half of 2015,
resulting in a year-on-year fall in
global crude steel output of 3.8% in
July to 132.9 million tonnes, accord-
ing to latest figures released by the
World Steel Association (WSA).
Capacity utilisation among the 65
reporting countries averaged just
68.4%, which is equivalent to a
decline of 4.2 percentage points over
July last year and of 3.8 percentage
points over June 2015.
Most notably, China’s production slid
4.6% to 65.84 million tonnes this July
while its daily output average was
8% lower than that recorded for the
previous month. However, more
recent figures suggest Chinese pro-
duction bounced back in early August
as members of the China Iron & Steel
Association upped their output by
3.6% in the opening third of the
month when compared with the final
11 days of July.
Returning to the WSA statistics for
July, these reveal that other top steel-
making countries to record lower
year-on-year production totals
included Ukraine (-24.1% to 1.869
million tonnes), Turkey (-10.4% to
2.539 million tonnes), the USA (-9.1%
to 6.989 million tonnes), Japan
(-4.9% to 8.838 million tonnes), Bra-
zil (-3.1% to 2.877 million tonnes)
and Russia (-2.8% to 6.048 million
tonnes).
Imports drag
down EU steel
industry prospects
EU steel demand is expected to
climb 1.5% this year ‘on the back of
sustained momentum in Europe’s
economic growth’, reckons Euro-
pean steel association Eurofer. How-
ever, European producers are not
expected to benefit greatly because
‘improving steel demand will be met
by imports of the metal, anticipated
to be up 5% this year’. Chinese
exports to the EU soared 49% year
on year over the first five months of
2015, the organisation points out.
Although GDP growth is being driven
by private consumption, investment
growth is ‘lagging’ owing to uncer-
tainty surrounding, for example, the
Greek debt crisis, structural con-
straints in the Euro area, slowing
global growth and geopolitical risks,
according to Eurofer. Activity in Euro-
pean steel-consuming industries has
remained ‘sluggish’ with only the
automotive sector experiencing ‘con-
fident growth’.
‘Our downstream clients are gener-
ally seeing muted business condi-
tions,’ says Eurofer’s director gen-
eral Axel Eggert. ‘They see little
impact from apparently brighter
macroeconomic conditions, and
headwinds and uncertainties persist.
That is why the corporate sector
remains cautious about larger-scale
investment in fixed assets such as
machinery and equipment, buildings
and new technology.’ Overall, total
activity in EU steel-consuming sec-
tors is expected to rise by 2% this
year and by 2.7% in 2016.
Meanwhile, apparent EU steel con-
sumption is expected to climb from
146 million tonnes in 2014 to 149
million tonnes this year, and then by
a further 1.9% to around 152 mil-
lion tonnes in 2016. ‘Nevertheless,’
Eurofer notes, ‘EU steel demand in
2016 will still be more than 25%
down on the pre-crisis level.’
RI-7 p00_Analysis Ferrous 49 04-09-15 08:38
