Global scrap prices continued to rise in most regions of the world amid high activity in the Turkish market – one of the largest importers of scrap metal supported by the demand recovery for steel and increased production.
HMS 1/2 scrap prices in the Turkish market increased, during March 6-13, 2023, by $8/t, or by 1.5%, compared to the previous week – up to $460-465 per tonne, and since the beginning of the year – by $64 tonnes or 16% with an upward trend over the past three weeks.
Scrap quotations in Turkey began to rise sharply sometime after the earthquakes when the country’s government announced a plan to rebuild the damaged areas in the next three to four months. Steel mills, in anticipation of a sharp increase in demand for rebar, began purchasing raw materials to fill warehouse stocks and prepare for a possible increase in production.
Local steel mills indicated they are ready to meet domestic demand for steel, which will be used to rebuild infrastructure, while export sales are expected to come to a complete halt.
Until steel manufacturers see stable and healthy demand for steel, they have to sacrifice profit margins as scrap prices increase, and there is not enough demand for rebar at prices in line with scrap quotations as scrap suppliers insist on not cutting raw material prices.
In the European market, scrap prices also rose due to the favourable situation in Turkey and higher demand from steelmakers. In particular, scrap prices in Italy as of March 10, 2023, increased by €30/tonne compared to March 3 – up to €400-440/tonne overall. A similar trend is also observed in France, Spain and the entire Eastern European region.
Tariffs increase on rail transport and freight affected raw material quotations from Northern and Eastern Europe and higher steel prices.
Scrap prices in the US also rose significantly amid March trading that started a week ago. This is the fourth consecutive prices increase in the US after a long downward trend last year.
In the week of March 3-10, 2023, scrap prices on the east coast of the United States increased by $5 per tonne – up to $436-441 per tonne.
As expected, scrap prices were supported by higher export supplies, improving demand, and higher US steel prices. April is also expected to boost scrap prices in the US.
China’s scrap market has stabilized as a considerable supply freed the market from supply problems. As of March 10, 2023, scrap quotations in eastern China were 3.15 thousand Yuan/tonne ($453 per tonne), up 5 Yuan from the previous week.
After steel prices rose last week, scrap prices stabilized, and scrap collectors have increased supply after fully resuming operations after the holiday.
Although scrap consumption has increased in China due to the resumption of production in EAF factories and the increased use of this raw material in blast furnaces, supply and demand are currently unbalanced.
The global scrap consumption in the first half of 2022 decreased by 8.4% compared to the same period in 2021 – to 248.79 million tonnes. The negative trend in scrap demand was supported by the decline in global steel production.
The global consumption of scrap metal in steel production in 2021 increased to 620 million tons over the year, and the share of scrap in steel production increased to 32%, while in 2019, it was 30%, and in 2020, at the height of the epidemic -29%.