BIR releases Ferrous World Mirror-February 2016

By Carolina Curiel (ScrapMonster Author)

February 04, 2016 05:16:48 AM

BRUSSELS (Scrap Monster):The Bureau of International Recycling (BIR) has released the February ‘16 edition of its World Ferrous Mirror.

The entire range of commodities from oil to ferrous scrap witnessed huge contraction in demand during 2015. The commodity prices have plunged to the lowest levels witnessed earlier during 199-2002. At the same time, costs have escalated to extremely higher levels when compared with those times.

According to BIR Ferrous Division president William Schmiedel, the reforms initiated by Chinese government authorities towards implementing supply-side reforms in all commodity sectors will benefit the industry. The administration plans to cut annual steelmaking capacity by 100-150 million tons per annum. However, industry experts believe that these cuts will not be sufficient to bring world capacity utilization rate to normal levels. The Chinese overproduction and exports badly impacted the world markets during the previous year.

The Japanese scrap exports which rose nearly 7% to 7.847 million tonnes in 2015 is not expected to increase much during this year, mainly on account of declining demand from South Korea. Incidentally, South Korea is the largest importer of Japanese scrap. The domestic scrap consumption by electric arc furnace mills in Japan is most likely to remain flat or post marginal growth in 2016.

Demand for steel scrap remained weak across the EU countries. India reported hectic international scrap trade activity during the year. The domestic mill orders witnessed modest improvement in the US. The scrap prices too reported marginal increase. However, bad weather conditions have limited scrap flow into yards. Russian steel mills and other exporters were benefited by weak ruble. Steel scrap collections plunged to 4.3 million tons in Ukraine, whereas exports jumped higher to 1.217 million tons.

The EU-28 region reported 21.3% decline in steel scrap exports during the first three quarters of 2015. The US scrap exports dropped by almost 14% during the same period. The other countries to record lower scrap exports were Canada (2.692 million tonnes, down 20.7%), Australia (1.402 million tonnes, down 16.4%) and South Africa (1.005 million tonnes, down 9.69%). Turkish scrap purchases dropped, whereas India purchased more scrap during this period.

Scrap usage declined sharply by 13.1% in Turkey and by 10.7% in Japan. The US and South Korean scrap usage levels declined by 8.2% and 7.8% during Jan-Sep ’15 when matched with the corresponding nine-month period in 2014. On the other hand, steel scrap usage recorded marginal increase of 0.5% in the EU-28 region countries.