Speaking at the SteelOrbis 2014 Spring Conference & 70th IREPAS Meeting in Barcelona, Ioannis Meimaroglu from Helveco Intertrade, chairman of the raw materials suppliers committee, stated that in the first few months of the current year
scrap exports from the US and Europe have declined by as much as 30-40 percent year on year, partly due to the harsh winter, but mostly due to the strong demand coming from local US mills.
"US suppliers said that, even if
scrap prices in the international market reach the level of $400/mt, it will be difficult to compete with the current strength of the domestic market. The same situation has been outlined by European suppliers from Germany, Belgium and Sweden as well."
The substantial decrease in
scrap exports from Romania - down to a monthly volume of just 72,000 mt compared to the previously normal monthly volume of 150,000 mt - came as a result of low
scrap collection prices.
"It seems that
scrap availability will continue at Rostov and other Azov Sea ports, especially after the opening of navigation on the rivers (around mid-April), but of course, only if international market prices reach at least the same levels as prices from domestic factories," Mr. Meimaroglu stated.
The IREPAS raw materials suppliers committee chairman said that Russian
scrap exporters are now facing an important financing problem, as banks are taking serious measures after the events in Crimea and in eastern Ukraine in general. This may lead to new financing conditions for the suppliers and their clients, at least for a period of time until the normalization of the relations between Russia and Ukraine, he remarked.
"A new fact, that was underlined by some participants, is that
scrap demand has now started to come from countries like Mexico and Egypt, which will further affect the availability of exports from the traditional suppliers," Mr. Meimaroglu said.
The chairman of the IREPAS raw material suppliers committee stated that the participants took into consideration the end steel products market, which does not allow steel producers to pay prices higher than a certain level, corresponding to their sales. "A participant said that every time that we achieve
scrap supply contracts higher than $400/mt, we are paying back later with contractual prices down to $330-340/mt. We noticed also that, during the last three years,
scrap prices seem to follow similar yearly trends, though price levels have declined each year," he said.