Steel Industry Insight

IREPAS raw materials committee: scrap collection levels below normal

In the last session of the SteelOrbis Spring ’12 Conference & 66th IREPAS Meeting held in London on April 1-3, long product and billet suppliers and producers, as well as traders and raw material suppliers, shared the conclusions reached at their special committee meetings regarding the current situation in the markets with the general participants at the event.
Ioannis Meimaroglu from Helveco Intertrade, the chairman of the raw materials committee, said that scrap collection levels are currently lower than normal. In some places, like Russia, according to the raw materials committee, this situation has been due to severe winter weather conditions, but generally is due to low market price levels, which are not attractive for local suppliers. Mr. Meimaroglu pointed out that there are new threats which may place pressure on scrap prices, such as freight rate increases and cost increases in some countries, and such as the recent energy cost increase in Turkey. “If such costs are not absorbed by the end products market, the consequences for scrap collection will be very important,” Mr. Meimaroglu warned. The raw materials committee also stated that domestic scrap production in Turkey has indicated remarkable growth lately, though still falling short of consumption levels. Scrap demand remains strong in Europe, in the US and Russia. Ex-short sea scrap suppliers, especially from the Black Sea, expressed the view that it will be very difficult for them to increase their scrap collection volumes due to the price policy of the steel producers. Finally, as regards the coming two months, the lack of container availability is expected to cause scrap supply problems to India and to the Far East in general.

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