Global Scrap Offers Remain Firm

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Year 2015 remained dull for global steel industry, with regards to performance. Export and import number at major markets recorded a drastic fall in the year. However, few markets like Bangladesh came up as emerging market with a handful of projects and capacity expansion

Scrap offers, which were hit significantly last year, owing to flooding of cheaper Chinese billet into global market, are stable at present. Recent price rise of iron ore and billet in Chinese market had showed some confidence to the market.

Turkey: Scrap import in the world largest scrap consumer/importer, Turkey fell by 14% in 2015 to 16.5 MnT against 19 MnT in 2014. Increase in billet import from China last year had hit scrap import/consumption significantly. Offers for HMS are at USD 173-179/MT, CFR Turkey.

USA: Ferrous scrap export in the country fell drastically by 15% to 11 MnT in 2015. Shift in interest to billet at its major scrap export destination like Turkey and Taiwan Korea hit US scrap export majorly. Current offers for HMS here are assessed at USD 164/MT and Shredded at USD 169/MT, FoB basis.

Europe: European union being a ready option for Turkey and other scrap importers like Germany and Egypt was comparatively less affected by Chinese billet in global market. Along with that domestic demand here remained strong for the year, with less selling pressure on export. Offers for HMS 80:20, presently are assessed at USD 150-154/MT, FoB Rotterdam.

South Africa: Scrap export from South Africa is likely to fall in coming months due to restrictions imposed by the government. South Africa contributes around 13% of total Indian scrap import. Current offers for HMS 80:20 (25 tonnes loading) to India are assessed at USD 200-205/MT, CFR Nhava Sheva.

South Asian market 

India: Indian scrap import rose by 21% in 2015 due to falling scrap prices in global market and lower DRI production in India. But, scrap import in India may fall in 2016 due to improved mining activities, which will help to increase DRI production. Current offers for HMS 1&2 from US/Europe are in the range of USD 190-195/MT, Middle East at around USD 195-200 /MT and South Africa at 200-205/MT, CFR Nhava Sheva. Shredded scrap offers from UK/US are around USD 205-210/MT, CFR Nhava Sheva.

Pakistan: Scrap demand is gradually picking up in Pakistan owing to rising steel demand and restricted import of steel products from China. However, rising availability of ship cutting may subdue import of scrap in 2016. Current offers for Shredded are assessed at USD 205-210/MT, CFR Port Qasim

Bangladesh: Scrap import to Bangladesh will increase almost 5 times in 2016 due to new electric arc and induction furnaces commissioned by Abul Khair and BSRM. Imports are expected to cross 2.5MnT in 2016 against 0.5 MnT in 2015.

Current offers for Shredded are around USD 210-215/MT, CFR Chittagong and HMS 80:20 are around USD 200/MT, CFR Chittagong.

Far East Asian 

Korea: Scrap import dropped by almost 30% in 2015 owing to cheaper import of steel from China. However, expected production cut in China may lend support to scrap import in Korea. Currently, few bulk deals from US for HMS 1 were settled at around USD 180/MT, CFR Korea.

Taiwan: Scrap import to Taiwan remained more or less stable. The country is expected to import around 2 MnT scrap in 2016. Current offers for HMS 80:20 from US are assessed at USD 160/MT, CFR Taiwan containerized basis.

Global Offers for Frrous Scrap as on Week 9, 2016

Source: SteelMint Research