Scrap prices have risen due to increased demand.
A long downturn in the scrap market in September-November seem to have played with buyers a cruel joke. Most consumers putting off purchases at all later date, met the winter with a minimum level of reserves and in December was forced to resume purchasing, giving providers a good reason to lift prices. Moreover, the demand expanded to almost all major markets, creating even some material shortage.
Since early December, scrap prices almost everywhere are up $20-50 for the Most dramatic, oddly enough, was the rise in the countries of southern Europe, where the steel industry is in deep crisis. However, Spanish and Italian companies that are faced with the need to create reserves for the winter, found on the market the lack of material that previously went to Turkey and Egypt. As a result of quotations of basic grades of scrap for the last three to four weeks have increased by 20-40 euros for T. In particular, the cost of material HMS № 1&2 (80:20) reached before Christmas 305-320 euros per ton CFR compared to 275-290 euros per ton in November.
Turkish companies are also at the same time with the Europeans increased their purchases of scrap. At the same time, good for metallurgists the situation on the regional market of long products has allowed them to transfer the rising costs to consumers and more or less painless to transfer the price increase of more than $30 per ton for part of the month. European HMS № 1&2 (80:20) A3 the black sea and eventually came to $455-460 / t CFR, and the American traders in the second half of December put the proposals is based more than $460 per ton CFR.
The confidence of American companies was to improve the situation in the external and domestic markets. In the US, major purchases of scrap steel companies also fell in December, in the result, there was a rise in price of the raw material at $15-25 per ton in addition to Turkey, the large orders of scrap exposed to Asian consumers.
In Asia happened in that story and in Turkey. More than two-month downturn has taught local steelmakers to the need to minimize stocks of raw materials, and when prices in early December, went up, speculative purchases quickly warmed up the market. In Japan domestic and export prices for scrap jumped by $40-50 per ton compared to the extreme point of the recession in mid-November. For customers in Korea, Taiwan and countries in Southeast Asia, the price increase amounted to more than $30 per ton In the second half of December, the value of U.S. scrap HMS № 1&2 (80:20) at the container delivery rose to $455-465 / t CFR, a large batch of similar material was sold in Korea by more than $475 per ton CFR.
The overall picture falls far only China, where the demand for import scrap is minimal. Proposals about the delivery of U.S. scrap HMS № 1&2 (80:20) come at the rate of $470-480 / t CFR, but traders refuse such purchases, evaluating them for the highest possible price level of $440-450 / t CFR. Unlike most other countries, China's domestic scrap prices in December dropped slightly. Steel production decreased, so the demand for raw materials is not very high, moreover, quotes on finished products in the Chinese market in recent weeks slowly receded.
However, in other countries of the East Asian market weakness, the reinforcement can act as a barrier to further rise in price of scrap metal. As the traders, the rise in December was relatively short-lived: the Steelworkers created the reserves for next month and a half and next time will return to the market, likely only after the New year on the Chinese calendar, which falls on January 23.
Yes, and in the Mediterranean, prices for scrap before Christmas fell slightly because of a desire of some traders to have time to sell until the end of the year. Turkish mini-mills, thus, had already completed its program of restocking of raw materials. Apparently, after the New year, suppliers will try again to raise the quotes on scrap metal, using as justification the recent rise in prices of long products in the middle East, but to perform this task it will be difficult.
Victor Tarnavsky
Rusmet.ru