Speaking at the last session of the SteelOrbis Fall 2012 Conference & 67th IREPAS Meeting held in Munich on September 30-October 2, Ioannis Meimaroglu from Helveco Intertrade, the chairman of the raw materials committee, said that steel mills are seeking to guarantee their orders before buying raw materials due to instability and difficulties in the finished steel market, which means that they have changed - or they have been obliged to change - their strategy from working on stock basis to working mainly on spot basis. He went on to state that this is affecting steel
scrap suppliers very negatively since they cannot collect material on a continuous basis, as they do not know at what price level the material will be sold when their customers come to the market.
However, the Helveco Intertrade executive added, this situation is also posing problems for steel producers, as they can never be sure of steel
scrap availability at the requested prices on spot basis.
Mr. Meimaroglu told attendees that sometimes steel producers can find the quantities they need at convenient prices from one source, as for example from the
US during last month. "This happened because the
US suppliers had no better alternatives in other markets, as well as because European suppliers were facing a higher euro/dollar exchange rate and ex-Black Sea
scrap suppliers were experiencing strong demand from their domestic markets," said Mr. Meimaroglu, "Accordingly, collection practically stopped in many places, as there was no possibility of exporting," he added.
Underlining that
scrap suppliers need time to collect
scrap and cannot meet demand from steel mills at short notice, Ioannis Meimaroglu said that
scrap suppliers understand the concerns of the steel mills and the uncertainty in the steel markets, as steel export destinations become more limited and as Chinese steel exports target steel mills' traditional customers. However, as Meimaroglu added, it is also very important for steel producers to help keep their raw material suppliers alive, as the latter are facing pressure from finished steel markets and also price competition in their domestic markets, as well as fluctuations in currency exchange rates and export regulations.