Speaking on October 6 at the SteelOrbis 2015 Fall Conference & 73rd IREPAS Meeting in Rome, Jens Björkman from Stena, the chairman of the raw material suppliers committee, said that the raw material markets were supply-driven, with a negative spiral seen in the scrap markets. He indicated that demand for scrap has followed a negative trend in the past few months, especially in Asia, pushing supply elsewhere and crowding the market.
Mr. Björkman pointed out that capacity utilization of steel mills has declined and this has affected scrap pricing since supplies have fewer destinations. He went on to say that intra-EU scrap demand was fairly steady, though it has slowed down in the past few months. On the other hand, in the EU scrap pricing was quite strong but declined during the summer period.
The raw material suppliers committee chairman said that prices have not bottomed out yet, adding that the decline in scrap prices in the US and EU is a result of lower scrap demand from Turkish mills. Mr. Björkman also said that lower prices will likely cause a reduction in scrap collection in the short term. Meanwhile, scrap supply from the Black Sea region, which is one of the main sources for some steel mills in Turkey, has dried up considerably.
Commenting on scrap usage predictions, the Stena official said that scrap demand is expected to be fairly good but may be dispersed over larger areas, and may not be concentrated as it was in previous years.