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Fall in Crude Oil, Iron Ore prices influence the Recycling market
Apr 9,2015 09:05CST
industry news
The fall of crude oil and iron ore prices is influencing the recycling market, but in different ways.

UNITED KINGDOM April 08 2015 4:12 PM
LONDON (Scrap Register): The fall of crude oil and iron ore prices is influencing the recycling market, but in different ways. The strong drop in crude oil price is heavily affecting the plastics recycling companies, since the cost of virgin materials is equally or more competitive than the recycled alternatives.

Several plastic recyclers are now supported in their business only by the government’s subsidies, facing more and more difficulties to cover the investments made in new technologies and plants to grow the recycling rate as high as possible. For example that is the situation of many companies involved in the ELV’s plastic fractions recycling.

This is not a positive prospect for the healthy environment in which the future generations will grow up. The situation in the ferrous recycling is different. The iron ore price is expected to drop below $40 per ton in a short time while the recycled HMS 1&2 ferrous scrap price is always moving up and down in the range between $240 and 270 a ton CFR Turkey.

The strong worldwide scrap consumption, the lower scrap collection and the DRI/HBI manufacturing costs are supporting these prices, helping the recyclers in their always heavier daily job.

In Italy, weak prices during the first two weeks followed by rising prices paid by the mills to increase their inventories before the Easter holidays.

At least the average prices remained unchanged on the domestic market. Also the monthly contracts settled with the European suppliers have been fixed at the same prices of February. March was characterized by lower scrap availability in several European countries. This is not only a consequence of the reduced scrap generation, but also of the aim of several small and medium size recyclers to keep their scrap at home, hoping for better prices at the start of the Summer. Always out of the market are Stefana, Lucchini Piombino and Ilva Taranto.

The deliveries to the mills from some foreign suppliers remained late. The arrivals at the Italian ports have been abt 70 Kt for scrap, abt 60 Kt for pig iron and abt 43 Kt for HBI. At the end of the month the inventories of some mills are normally recovered.

The prices for April will be driven by the Turkey persistent scrap demand in a slow upward price situation. In general the economic expectations are a little better now, and steel demand has to grow as usual after the end of the winter.

Some new info about Ilva: The Taranto plant is working at low capacity after the stoppage of BF1 and BF5 for maintenance. The new Commissioners and management are working to fulfill all the obligations needed for the NewCo establishment, according to the last legislation passed for this purpose by the Italian Parliament. Some increments in the output volumes of tinned and galvanized coils are foreseen in the Genoa and Novi plants.

Pig Iron – H.B.I.

The pig iron arrivals from the Black Sea ports have been lower than the previous months, more or less half. The last pig iron offers from the Black Sea ports are quoted below $280 pmt CIF, for May shipments, also with some lower price “indications”. Two HBI vessels, one from Libya and one from Russia, arrived in March. HBI offers are reported around Usd 240/250 pmt CIF Italy, from Venezuela, Russia and Libya.


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