Metals News
Currency fluctuations dampen ferrous scrap buying sentiment in emerging steel markets: MEPS
industry news
Oct 9,2013

UNITED KINGDOM October 03 2013 12:45 PM

LONDON (Scrap Register): Challenging business conditions persist in India. Negotiations for October scrap settlements are expected to be arduous. Secondary steel producers have had mixed success in transferring the additional cost burden of sponge iron and semi-finished steel products on to their customers.

Negative price expectations have taken hold in the Japanese scrap market. Local brokers are now forecasting lower domestic scrap charges in October, following Tokyo Steel Manufacturing’s decision to cut its HMS2 purchasing prices at all five of its subsidiaries. Other electric steel producers have responded with similar sized price decreases.

Russian transaction values for 3A-graded material softened in the central, southern and Ural federal districts. Local traders are concerned about the outlook for prices and underlying demand growth in the final trimester. The domestic construction season is forecast to end earlier than expected.

CIS exporters remain bearish about the outlook for offshore trade. Tonnages designated for overseas sales have been limited. Turkish importers have sought additional concessions this month, brought on by the low pricing positions adopted by European and American competitors. In week 38, St. Petersburg traders lowered their export figures to neutralise the attractiveness of the offers circulated by their overseas competitors.

Effective price settlements for the three bellwether cut grades tracked in the United States declined in September. Scheduled maintenance work and the healthy flow of feedstock into yards have exacerbated the situation. Local brokers are also worried that export yards may choose to divert unwanted scrap material into the domestic market if overseas trade fails to recover. Exporters, operating out of East Coast and West Coast ports, remain concerned that foreign buyers will persevere with “strategic purchases” in the fourth quarter.

The outlook for the South African ferrous scrap market is unchanged. The government has enacted its scrap export directive, which stipulates that domestic consumers must be given first right of refusal and preferential prices. Under the new framework, export permit applications will be regulated by the International Trade Administration of South Africa (ITAC). The South African Metal Recyclers Association (MRA) has remained vehemently opposed to this legalisation.


Currency fluctuations
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