Starting from the first month of the year,
CIS scrap prices keep their strong stance. Prices saw increases in the first two months of the year, and for the moment do not seem to hint any softening.
There is no doubt that the tight availability under the impact of harsh winter conditions coupled with strong demand have triggered this upward movement.
Turkish producers very mainly focused on deep sea cargo purchases from
Europe during the first half of February. In the second half, buyers in
Turkey halted purchasing, having secured enough amount of supply till early April. Although prices in both January and February saw increases, it should be mentioned that in this destination the amount of increase was stronger in January.
As the Turkish buyers were for a certain while very focused on European
scrap, the steel mills in
Spain and
Italy have had some tough time securing volumes in their local market, with their procurement prices left uncompetitive against the export markets.
Following the rises Russian origin A3
scrap faced in February, the price for
Spain and
Italy is currently at around $240-250/mt CFR.
On the Southeastern Asian side, the
scrap market has started to pick up as of the second half of February. Here, in this region market level for A3 grade ex-
CIS is at around $250-255/ton C&F, while H2 grade ex-
Japan reached $250/ton C&F.
In
China,
scrap prices were generally stable in the first two months of the year, however, mills have preferred
pig iron to
scrap for most of their operations so far, as the price difference between
pig iron and
scrap was narrow. The price of
Kazakhstan scrap fell $2/mt at the beginning of February and later remained stable at $210-214/mt in Alashankou. Short supplies of the
CIS scrap helped to keep prices unchanged, while the price of
scrap imported from East Asia and the USA decreased in Zhangjiagang.
Scrap prices also dropped in Jiangsu province from $248-251/mt in January to $243-245/mt in February, in Hubei province from $256-261/mt to $249-253/mt, in Liaoning from $247-253/mt to $243-245/mt and in Heilongjiang from $234-236/mt to $224-231/mt. Especially, the inventory of the
CIS scrap at ports is low.
Scrap steel imports in Alashankou decreased 69.4 percent year on year in January. Steel mills do not keep large
scrap inventories either. However,
China is expected to increase
scrap imports from the
CIS countries again in the spring, when the prices fall further.
The main problem in order to see the future of the market is the lack of any offers or bids hint the direction however, suppliers expect a rise especially in Taiwanese market.
As a seasonal routine, arrival of spring will eventually help improve the deliveries of
scrap from the
CIS origins, but to see some softening in prices might not happen so quickly. We see
Russia and
Ukraine increasing their offers for local deliveries which may still not be enough for suppliers to stop preferring exporting.
Since the beginning of the year,
scrap export prices in
Russia and
Ukraine is on the rise. In line with this fact, some industry experts predict that it should be expected that the export prices of
scrap from these origins may stay at these levels, if not to reach $255-260/mt CFR
Turkey levels, until late March.