CURRENCY FLUCTUATIONS DAMPEN FERROUS
SCRAP BUYING SENTIMENT IN EMERGING STEEL MARKETS - MEPS
Challenging business conditions persist in India.
Negotiations for October scrap settlements are expected to be arduous. Secondary
steel producers have had mixed success in transferring the additional cost
burden of sponge iron and semi-finished steel products on to their customers.
Negative price expectations have taken hold in the Japanese scrap market. Local
brokers are now forecasting lower domestic scrap charges in October, following
Tokyo Steel Manufacturing’s decision to cut its HMS2 purchasing prices at all
five of its subsidiaries. Other electric steel producers have responded with
similar sized price decreases.
Russian transaction values for 3A-graded material softened in the central,
southern and Ural federal districts. Local traders are concerned about the
outlook for prices and underlying demand growth in the final trimester. The
domestic construction season is forecast to end earlier than expected.
CIS exporters remain bearish about the outlook for offshore trade. Tonnages
designated for overseas sales have been limited. Turkish importers have sought
additional concessions this month, brought on by the low pricing positions
adopted by European and American competitors. In week 38, St. Petersburg traders
lowered their export figures to neutralise the attractiveness of the offers
circulated by their overseas competitors.
Effective price settlements for the three bellwether cut grades tracked in the
United States declined in September. Scheduled maintenance work and the healthy
flow of feedstock into yards have exacerbated the situation. Local brokers are
also worried that export yards may choose to divert unwanted scrap material into
the domestic market if overseas trade fails to recover. Exporters, operating out
of East Coast and West Coast ports, remain concerned that foreign buyers will
persevere with “strategic purchases” in the fourth quarter.
The outlook for the South African ferrous scrap market is unchanged. The
government has enacted its scrap export directive, which stipulates that
domestic consumers must be given first right of refusal and preferential prices.
Under the new framework, export permit applications will be regulated by the
International Trade Administration of South Africa (ITAC). The South African
Metal Recyclers Association (MRA) has remained vehemently opposed to this
MEPS - Ferrous
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