At the SteelOrbis 2017 Fall Conference & 77th IREPAS Meeting being held in Athens on September 24-26, Jens Björkman from Stena Metal International, the chairman of the raw material suppliers committee, said that during 2017 global steel production has shown continued strength, resulting in a solid increase in scrap demand. He added that increased Chinese domestic consumption has helped to reduce steel exports coming from China, contributing to a strong global steel market for most of this year.
Mr. Björkman said that one of the major changes in the market is that China which had long been a net scrap importer started to export scrap despite the 40 percent export duty and became a net exporter as induction furnaces halted production as part of structural reforms in China.
The raw materials committee chairman indicated that the current situation seems very encouraging for the rest of the year for the scrap market, considering that Turkey, a major scrap consumer, has increased its steel production to above 3 million mt per month lately. He went on to say that, with the absence of steel exports from China, EU-based producers have been doing well for the past nine months.
Commenting on scrap pricing in the EU, Mr. Björkman said that the recent buildup of scrap supply has put pressure on pricing for the short term, while domestic prices of obsolete scrap in the EU, especially in Germany, are at record high levels. He added that the market will likely see high prices for prime scrap.
Regarding the electrode shortage, Björkman stated that, given the induction furnace closures in China, it will be an interesting year to see how this affects the electric arc furnace-based steel markets.
