International Scrap prices likely to reach its peak

Friday, September 17,

East Asian and Turkish companies have accumulated the stockpiles for September and October and thus have decreased their purchase volumes. And as result it is affecting the price levels.

Far East market has also been weak in recent times. Steel producers from Taiwan, Korea and Vietnam have decreased their purchase in the beginning of September 2010, since they acquired Scrap several weeks ago. That is why the US and European suppliers had to make concessions.

The price of HMS No 1 in containers has decreased by $10/ tonne. Some traders offered bulk HMS No1 at $420/tonne CFR, but real contracts were concluded at USD 410 per tonne CFR.

The situation in Turkey is also indefinite. The US traders increased the HMS No 1&2 (80:20) price to about $405/tonne CFR. And the increase was supported neither by the consumers, nor by the majority of suppliers from Europe and Asia.

The decrease of import in Asia and Turkey affected European and the US markets as well. In Southern Europe, Scrap prices in September increased by about EUR 10/ tonne, although larger growth was expected to EUR 30/tonne. In Italy, the price of HMS No 1&2 is EUR 290-300/tonne including delivery. It is unlikely to exceed this level.

However, Indian market witnesses stable demand and higher prices. Local steel producers are planning a price rise in the Q4 and thus are ready to buy raw materials.

The International prices are expected to grow again as soon as the demand in Turkey, Asian countries, or USA recovers.