Latest News Within the Scrap Metal Industry
Scrap Price Forecast: Time For a Change?
Are scrap prices on the turn? Two recent reports out, one from The Steel Index (TSI) and the other from Ukrainian metal research group Delphica, suggest they may be.
Turkish prices have been falling steadily for three months and indeed the June average was still down on May, but the last few weeks have seen an upswing both in prices and demand as mills have come back into the market, the TSI reports.
As a result, US scrap prices, which had seen a decline earlier in the month, picked up towards the end and finished a few dollars higher than they started. The Turkish mills have been taking metal from both European short sea sources and the US East Coast, according to Delphica, and although demand is still weak and Turkish mills have been facing pressure from cheap Chinese finished steel prices, they have been re-stocking of late. After starting out in the month of June with an eight-month low, US domestic prices finally showed an uptick towards the end of the month on the back of firming domestic demand and slightly better exports.
The pick-up in exports was backed up by slightly firming freight rates from the US East Coast to Turkey, the US’ largest scrap export market. The modest pick-up is in contrast to Asian prices, which have continued to fall, led in particular by India where the Indian rupee’s weakness has impacted buyers’ willingness to import scrap – prices have dropped $40/ton between May and June, the TSI advised. Domestic demand and hence prices remain weak in South Korea and Taiwan. Arguably, with Turkish mills now better stocked for the July/August period and Ramadan approaching, significant further buying from Turkey is unlikely; unless it is perceived prices have significant upside still to come, in which case some positional buying may result. The main impetus to the US scrap market appears to be internal, with US mills’ increased buying allowing scrap processors to raise prices. This trend could continues into July, with scrap price rises of a further US$30-40/ton rumored to be likely.