At the SteelOrbis 2021 Spring Conference & 84th IREPAS Meeting held virtually on March 15, Jens Björkman from Stena Metal International, the chairman of the raw material suppliers committee, started off by commenting on China’s scrap imports, which is currently one of the hot topics in the raw materials market. He said that China’s scrap imports have not affected the market so much as they have mainly been coming from Japan in small tonnages. He added that in the first quarter the scrap prices given to China have not been competitive. At the same time, however, he said he viewed China as leaning towards more usage of scrap rather than of other raw materials. Furthermore, he pointed out that steel production through the EAF route is also increasing in China, with domestic scrap supply getting better.
As regards the EU market, Mr. Björkman indicated that China has not had any direct effect on the EU scrap market, as not much scrap moves from the EU to China. He stressed that Japan and the US West Coast are the main scrap suppliers for China. Southeast Asian countries which receive their scrap from the abovementioned sources will be more directly affected by Chinese imports. Bangladesh, for example, may need to source its scrap from alternative sources. The committee chairman said that the excess material in the EU scrap market is quite substantial and that intra-EU trade is active, adding that, accordingly, he believes that limiting scrap exports from the EU would be challenging because there is a need to move scrap material out of the region.
Regarding Turkey’s steel production and scrap imports, Mr. Björkman said that steel production in the country will continue to increase, which will result in added scrap demand. He said he expects that the second quarter will be active with quite substantial imports of scrap by Turkey, with volumes coming from the US and EU. He added that pricing depends on scrap availability, shipping costs, regional domestic demand in the EU and US domestic demand. The Stena Metal official pointed out that scrap availability could move up during spring, leading to oversupply, but demand will also go up. He said that the new price levels for scrap trading in Turkey this year will be in the $400s/mt, instead of the $300s/mt. Björkman said that the scrap market is a lot firmer than before, while he concluded by saying that economies will be opening up faster than expected in the next few months.