Ferrous scrap prices at lowest point in 11 years.
2015 has been ‘a very tough year’ in which the ‘bad economic climate’ has led to adverse effects on companies’ budgets and employment plans, according to the BIR non-ferrous metals division’s president David Chiao of the Uni-All Group in the USA, in a report in Recycling International.
Addressing the divisional meeting in Prague recently, Nick Rose of UK-based Tandom Metallurgical Group echoed these same sentiments in his world market summary. ‘It was never going to be the year of plenty but the most pessimistic of bears couldn’t have foreseen the constant downward spiral of 2015,’ he lamented.
Billet exports from China ‘at ever-decreasing prices’ had been ‘truly the cause of the present condition of ferrous scrap values’, stressed BIR ferrous division president William Schmiedel of Sims Metal Management in the USA. ‘The good news,’ he added in Prague, ‘is that the lower prices we are experiencing today should enable our customer base to again start to look at ferrous scrap as a reasonable, viable and economic option.’
At the BIR stainless steel and special alloys committee meeting, its chairman Joost van Kleef of Oryx Stainless described 2015 ‘as one of the most challenging years to date for the stainless steel recycling industry’.
China’s continued exportation of its excess steel production in the form of semi and finished product has forced down ferrous scrap prices to levels ‘not seen in 11 years’, laments William Schmiedel, president of the BIR ferrous division.
“Our industry needs to find new ways to compete. We cannot look to the market to help us but should rather concentrate on the things we can control, like our costs and streamlining our production wherever we can.”
China’s finished steel exports in July and August combined for over 19m tons but even this figure was eclipsed by the record-breaking 11.3m tons shipped out in September alone, he points out. Among those countries feeling the impact, a number of steel mills in Taiwan are said to be in trouble ‘and might have to close’.
And in the USA, scrap inventories have exceeded mill demand for the last quarter and thus provided domestic steel mills with an opportunity to ‘continually reduce scrap prices month over month’. When consumers looked to lop US$ 50 off scrap prices in October, ‘most scrap sellers capitulated and took any orders they could find’. This weakness appears set to persist into November as many mills’ order books remain weak and scrap ‘continues to overhang the domestic market’.
The summary of the EU market puts Chinese billet at around US$ 260 per ton – or a reduction of approximately US$ 80 since July. HMS into Turkey has duly dropped to US$ 165-170 per ton, which is equivalent to a US$ 100 slump since the middle of 2015. These low scrap prices ‘have adversely affected businesses across the entire EU’, with some operators suggesting volumes are down as much as 40%.