Posted on 29 Jul 2019
Better times are ahead for the scrap market following the current summer lull that is lasting longer than usual, with the unusual buying pattern by Turkish steelmakers adding to an already uncertain market. This is according to Bureau of International Recycling (BIR) Ferrous Division President Greg Schnitzer.
Iron ore pricing sitting at close to record levels could but is not guaranteed to provide the possibility of more scrap consumption versus iron ore.
“Some of the recent factors affecting today’s market include summer maintenance and expensive power,” Schnitzer says in a report seen by Kallanish. “Future possible effects, meanwhile, could come from: Brexit; IMO 2020 fuel regulations; Section 232 and all other trade impacts; and new capacity.”
BIR Ferrous Division board member George Adams says US scrap prices seem to have found a floor in July following price drops in May and June. This has been supported by exports, with prices to Turkey and Asia both seeing incremental increases in late June and early July.
“That allowed dealers to hold scrap prices steady in July, other than a few early deals at $10 lower,” Adams observes. “That drop was premature, and those dealers will probably see that money returned in August as (US) HRC prices and export prices have both improved. That will be supported by lower scrap availability as intakes at dealer yards remain lethargic.”
In terms of UK scrap exports, there is reasonable demand but it has become more sporadic, buoyed in recent days by attractive exchange rates, according to BIR Ferrous Division board member Shane Mellor.
“Some containerised markets (particularly Indonesia) have been more difficult to sell into price-wise while the main export outlets of Turkey, India and Pakistan continue to be very fickle concerning consumption and prices paid,” Mellor comments.
“Many UK merchants continue to report slow intakes at their processing facilities, exacerbating the demand for inter-merchant material, which in turn is hampering margins, as participants continue to secure all-important tonnage,” he adds.
