The demand for the scrap metal market is traditionally hesitant because the largest buyers usually carry out procurement in "waves" lasting about two or three weeks, and then reduced activity for the next month and a half. Currently, it is about time another "off-season". At the same time, none of the major players has no plans for the near future the resumption of purchases. Metallurgical companies cut production due to the economic downturn and reduced prices. As a result, they try not to create reserves falling in the eyes of the raw materials. Over the last month and a half quotes on scrap metal in major markets fell by $40-50 per tonne and continue to fall.
Turkish companies in the second half of October began careful procurement of scrap. However, they successfully bring down prices. Despite the appreciation of the Euro against the dollar the European traders are still dumping policy, seeking to compensate through exports the falling demand in the domestic market. The cost of European material HMS № 1&2 (70:30) in the supply to Turkey dropped to $410 per ton CFR and less. Higher quality scrap (80:20) is offered at $425-435 per ton CFR, and, in these conditions you have to accept not only European and American suppliers.
In US domestic scrap prices held relatively constant level over the last five or six months, due to the deterioration of the export market went down. Local analysts expect in November cheaper kinds of scrap for $10-30 per ton, Some factories put the orders for HMS No. 1 at around $385 per ton with delivery.
In October, U.S. exporters have almost lost not only the Turkish but also the East Asian market. The far East the company has sharply reduced purchases of scrap abroad, preferring lower-quality but much cheaper local material. The remaining market players are successful play on the slide. In particular, the Korean company Hyundai Steel has purchased a large shipment of American material HMS № 1 with delivery in November at $455 per ton CFR by $40 per ton cheaper than the previous month. In General, large batch of such scrap are available in countries in the region at $465-480 / t CFR, but the special interest of the buyers they do not cause. The cost of similar material in the supply containers fell to $420-425 / t CFR Taiwan. In Southeast Asia the demand for American scrap metal is practically zero.
Fell sharply scrap in China. If at the end of summer the material is equivalent to HMS № 1, sometimes at a cost to local plants more than $600 per ton with delivery, now the largest factories in the Eastern provinces slowed down the purchase price to $520-535 per ton, but some enterprises – and up to about $500 per ton with delivery. Quotations for finished steel in China continue to fall, so it is obvious that the scrap will be reduced. Some Chinese companies are showing interest in the import of metal scrap, but reported a willingness to buy the material is not more than $400-410 / t CFR.
In Japan's domestic scrap prices since the beginning of September also fell by about 20%, for the first time in the last 12 months, dropping to less than 30 million yen (about $385) per ton with delivery. The local market is now no shortage of scrap, but with its Japanese sales companies are experiencing certain problems.
Apparently, the downturn in the global scrap metal market is already close to its "peak". This, in particular, a certain pricing stabilization in the Turkish market. Steel company in Asia in the last few weeks not resort to large-scale procurement of import probably spent most of its stocks of raw materials. But while the global steel market is in the doldrums, the best that can count the scrap suppliers ? this suspension drop. Time to grow will come no earlier than Dec.
Victor Tarnavsky Rusmet.ru