GLOBAL FERROUS SCRAP PRICES RISE IN DECEMBER

Global ferrous scrap transaction values in December were supported by tight supply and moderate end-user demand. Price growth transpired in twelve of the thirteen domestic markets surveyed by MEPS (International) Ltd.

In China, average provincial quotations increased. Domestic scrap traders are forecasting transaction values to stabilise in the period to the “Chinese New Year Festival”. Leading mills are planning to either lower plant utilisation rates or carry out planned maintenance work. Weather conditions are also now unfavourable in the Northern provinces.

The price growth in Japan was instigated by Tokyo Steel Manufacturing. The steelmaker raised its HMS2 buying prices at all subsidiaries in week 48. Selling figures are now back at October levels, fuelled by tight domestic supply, the cost of US material and a need to replenish depleted stocks. Enquiries from overseas customers have also intensified this month – particularly in South Korea and Taiwan.

In Russia, transaction values for 3A graded material in the central and southern federal districts edged higher. Offers were stable in the Urals. Price sentiment was unsettled by the recent depreciation in the rouble and improved overseas sales volumes. Dealers are forecasting that selling figures will stabilise in early 2012.

Purchasing prices sharply increased in the United States. The supply of scrap tightened, following a rebound in East Coast export trade. Bullish mid-west and north-east dealers are forecasting higher selling figures in January. Unfavourable winter conditions have already begun to disrupt collection rates and restrict the flow of material to the yards.

Turkish mills resumed trading in week 48. Local dealers are forecasting import offers to soften once winter reserve targets are realized. They contend that domestic demand for finished steel is insufficient to support the recent ferrous scrap trading volumes. In contrast, bullish US exporters predict import offers to surge higher in January.

The general outlook for the South Korean market has improved. Local steelworks issued higher purchasing prices to secure material before the year’s end. Foreign dealers are more optimistic than last month. Offers have been lifted on the back of the uptrend in global markets.

Taiwanese mills, operating electric furnaces, have continued to employ conservative purchasing policies in December. Foreign suppliers adopted aggressive pricing positions in weeks 48 and 49. The latest import offers for HMS1&2 (80:20) and HM2 attracted minimum interest.

Source: MEPS - Ferrous Scrap Review  Also see: MEPS - Scrap Price Table

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