Speaking at the last session of the SteelOrbis Fall 2013 Conference & 69th IREPAS Meeting held in Istanbul on September 22-24, Ioannis Meimaroglu from Helveco Intertrade, chairman of the Raw Materials Suppliers' Committee, stated that scrap suppliers fully understand the difficulties that steel producers are facing in selling their finished products in the today's market situation and their efforts to reduce their costs, including the costs of raw material. He went on to stress that scrap suppliers are indeed trying to reduce their scrap collection prices, while they are facing two important problems as regards their scrap offer prices:
1. Domestic market competition, where scrap demand increases because of the introduction of new steel capacities, or because the winter is coming, or because steel mills want to take advantage of low scrap prices.
However, Mr. Meimaroglu said, when scrap prices are going down and margin expectations also diminish, a significant number of scrap collectors halt their activities, which leads to reduced scrap availability.
2. Scrap prices are influenced by prices of other raw materials, including iron ore and steel billet, which can be used - as nowadays - as an alternative, when prices allow it.
Meimaroglu continued by saying that the greater degree of stability that scrap suppliers are seeking in order to better plan their medium-term activity, is impossible to achieve. Due to unpredictable market conditions, scrap suppliers are keeping their inventories low, which in turn results in increased volatility.
The Helveco Intertrade official told attendees that official policies and regulations, especially in some countries, is completely hostile to scrap exports, aiming to limit them as much as possible.
Furthermore, financing by banks - due to the general economical situation, but also due to problems which have arisen in recent years in the steel sector - is becoming more and more difficult to obtain and more limited, Mr. Meimaroglu said, adding that the dollar exchange rate is becoming an important factor in cost creation, affecting the market and competition in different areas.
In conclusion, Meimaroglu underlined the general view among all participants that scrap suppliers are currently going as low as they can in terms of prices while still managing to provide steel mills with regular supplies of good quality material.
"Scrap exists. But we need real workable prices, allowing us to collect and to deliver properly to our clients," he concluded.
The SteelOrbis Fall 2013 Conference & 69th IREPAS Meeting witnessed a record participation from scrap suppliers with 42 representatives from 26 different companies.