/Rusmet.ru, Viktor Tarnavskiy/ Scrap prices growth continued in global market for more than two months, from the beginning of Nov., stopped in Jan. In eastern Asia the prices for U.S. scrap HMS № 1 stopped at the level $360-365 per ton CFR for the delivery to Korea and Taiwan and $370-380 per ton CFR in Chinese market. In Turkey the quotations for the U.S. HMS № 1&2 (80:20) have not exceeded $360-365 per ton CFR; in the second half of Jan. local companies preferred to buy European material, which price gradually decreased from about $345 to $335 per ton CFR.
The expectations for Feb. are not very much positive for the suppliers. In Japan domestic prices have already started the decrease. In the USA, where high-quality scrap grades approached $400 per ton incl. delivery and HMS № 1 reached $300 per ton and more in Feb. the prices will remain the same or somewhat decrease. The decrease which started in the Mediterranean can continue, since long products manufacturers have not managed to gain steel products prices increase.
In the end of Jan. the demand for scrap fell in all key markets at the same time. The U.S., European, Turkish, and Japanese companies actively purchased the material in the first half of Jan., which caused peak boost of scrap prices in recent 14 months. They have provided themselves with the stockpiles for several weeks ahead and can wait for the prices decrease.
In China in the second half of Jan. the demand for raw materials decreased. Bad weather conditions caused the problems with electric energy supplies, which hurt small mills. Due to the slump in local long products market some companies had to terminate rebar production; for traders imported raw materials grew too expensive.
However, all these problems seem to be temporary for scrap suppliers. Scrap market in recent years was cyclic: the slump certainly follows by the increase. At that it promises to become even more capable than in Jan. Metallurgical companies, which returned to the market can face acute shortage of raw materials. Uncommonly cold winter in Europe, Russia, China, and the USA caused old scrap collecting decrease and buying prices growth. The sources of industrial scrap are limited due to the economic slowdown, which are very noticeable in metal processing industries. In the second half of Jan. Romania and Russia almost stopped scrap export and all scrap was used for local needs.
Obviously, the first push for the new increase can be the prices growth in China. Many specialists say that after the Chinese New Year holidays (in the end of Feb.) the demand and the prices for steel products will boost. By all appearances Chinese metallurgists will increase scrap demand after the holidays and will agree for higher prices. By that time January stockpiles at Turkish and the U.S. mills will come to the end.
Some meteorologists believe that the frosts in the northern hemisphere can continue till April. So there will be no reasons till April for sustainable decrease of the scrap prices in global market.