Global scrap prices declined last week amid weak steel demand and uncertainty about the future economic outlook.
With stagnant demand for steel, steel companies see little benefit in replenishing raw materials stocks and continue to pressure scrap prices. HMS 1/2 scrap prices in Turkey for May 1-8, 2023, decreased by 4.5% compared to the previous week, which amounted to $375-385/t.
Scrap quotations in Turkey are under more pressure as buyers show no interest in purchasing raw materials.
Average offers from the EU sellers, the Baltic States and other regions are $380 per tonne, but some are willing to sell at lower prices because they need cash flow and cannot argue with consumers over the price.
The majority of market participants currently believe that the market price level under these conditions is no more than $375/tonne, and some Turkish steel manufacturers are convinced that prices will drop to $350/tonne soon.
Even with this price level, there is no certainty that steelmakers will return to buying because the global markets’ situation is disappointing, demand is declining, steel prices are falling, and competition is getting tougher with uncertainty in finished product sales.
The Chinese market also saw scrap prices fall last week by 2.1% to $395.57 a tonne. Chinese scrap prices were flat earlier but fell sharply as trade resumed after the Labour Day holiday.
During the week from May 1 to 8, 2023, the utilization level of EAF steel mills decreased by 10.2% to 52%. Average daily sales of scrap metal to steel companies in the country decreased by 21.6% to 207,000 tonnes, and average daily consumption decreased by 9.4% to 261,000 tonnes.
The fall in scrap prices has led to a significant drop in the profits of China’s mining industry, forcing scrap collectors to reduce the supply of raw materials in the market. Such a move could support prices temporarily, but only in the event of a cascading decline in steel production.
The adverse situation of the Turkish market continues to affect the US scrap prices as the price of scrap in the US market decreased for the week of April 28 – May 5, 2023, by 3.1% compared to the previous week – to $374 -378 per tonne.
With no demand from Turkish steelmakers and steel prices continuing to fall, the market does not expect commodity prices to rise in the short term.
Scrap metal collection volumes in Ukraine in March 2023 decreased by 23.2% compared to the previous month, reaching 70.4 thousand tonnes. Scrap metal exports for March 2023 amounted to 15.5 thousand tonnes, 6.1% less than in February 2023.
