Turkish buyers realize that currently there is a general shortage in the availability of ferrous scrap in the global market, which is going to become more severe going forward, and buyers are hence looking to book sufficient material now in anticipation of a shortage ahead, which consequently is driving the prices up, said Mr Zain Nathani, Managing Director, Nathani Steel and VP of MRAI, in a recent podcast with SteelMint.
According to him, the persisting covid-19 restrictions mean that there will be less scrap flowing into the yards of Europe and North America, the largest scrap exporters who have been impacted the most by the pandemic. As a direct consequence of this reduced scrap inflow to yards, the prices have shot up by around USD 50/MT in just over two weeks and may continue the uptrend in the coming weeks.
Mr Nathani added that, presently there is definitely more demand for cargoes of scrap than the suppliers can currently offer, and the demand- supply imbalance is very likely to continue for most of the year 2020.
As countries like UK, Belgium, France and others have started shutting down their yards, increasing the scrap shortage, and considering that South Asian countries may recover from the pandemic sooner than the Europeans, then it will deepen the demand-supply gap even further. In such a case, it will depend on the specific region and market, as to which regions are willing to pay higher and can afford the higher prices. Classic example is the difference between Bangladeshi large mills and Indian buyers.
Impact of the ongoing covid-19 pandemic on containers and bulk shipments – It is going to be a different situation for bulk and container shipments. Bulk suppliers have been majorly prepared and anticipating the situation, and the shipments as well as discharge on the bulk side are expected to be mostly on time. The issue is severe on the containers’ side, as lacks of containers have got stuck at the Chinese ports. In India too, mills being closed and transporters not available due to lockdown. MRAI is working very hard with the Shipping Ministry and other authorities, to help resolve the issue by getting the members relief through freight detention and demurrage waivers etc. Hopefully by next week, we can see it opening up in a phased manner.
To listen to podcast —
Leave a Reply