October 11, 2016 08:22:18 AM
SPOKANE (Scrap Monster): The Bureau of International Recycling (BIR) has released the October ‘16 edition of its World Ferrous Mirror.
According to BIR Ferrous Division president William Schmiedel, the exports of finished and semi-finished steel from China continue to remain at high levels, thereby hampering the trade in many countries. However, the exports have dropped remarkably from exceedingly high level of 10.9 million tonnes recorded in June this year to 9.1 million tonnes in August. The high export volumes have forced many world countries to impose duties on steel products import from China. Recently, the EU had decided to impose tariffs as high as 73.7% on hot-rolled coils and heavy plates imported from China.
The World Ferrous Mirror welcomed the Chinese State Council’s decision to approve the merger of two Chinese major steel producers-Wuhan and Baosteel. The merger is expected to rationalize the country’s steel production. As per industry experts, the merger is expected to result in major reduction of excess capacity, since both the companies produce high-end steel products like silicon steel and steel used in automobiles. Moreover, the merger will make it the world’s second biggest steel producer after ArcelorMittal.
The scrap consumption by integrated steel mills is expected to increase, mainly on the back of recent surge in coking coal prices. A Turkish integrated mill had recently announced its decision to almost double the scrap usage to reduce the high production costs on account of rising coking coal prices. Incidentally, steel scrap usage by Turkish mills has increased by over 2.2% during the initial six-month period of the year to 13.26 million tonnes. The country’s steel scrap imports too have surged higher by 8.3% to 9.178 million tonnes during the half-yearly period in 2016. Meantime, Japanese integrated steel mills have also decided to increase their scrap ratios.
Among Asian countries, Taiwan has reported significant drop in scrap demand. The market in South Korea too continued to remain weak, with no immediate signs of recovery. The bulk scrap imports into the country have declined drastically. Meanwhile, Indian market reported five bulk scrap cargo imports during late-September this year. The US, Australia and the UK continued to be the key scrap suppliers to Bangladesh. The steel scrap usage by Korea reported sharp decline of 7.1% year-on-year during Jan-June ’16. The usage by Russia, China and Japan declined by 2.8%, 1.2% and 1% respectively.
The US market reported reduced scrap flows, raising fears of shortage of scrap in the event of an anticipated rise in demand following the winter season. The scrap prices have witnessed sharp fall recently. The prices are likely to witness further drop towards the end of the fourth quarter this year. The US scrap shipments totaled 5.901 million tonnes during Jan-June ’16, falling by over 15% year-on-year.
The European ferrous scrap market is expected to remain more or less flat during the fourth quarter on account of muted finished steel demand and falling billet prices. The scrap prices in the region are expected to move in a tight range. The BIR ferrous division statistics indicate that steel scrap consumption for crude steel production in the EU-28 countries dropped significantly by over 7% to 45.38 million tonnes during the initial six-month period of the year. On the other hand, EU-28 continued to remain as the largest steel scrap exporter. The exports were up by over 15% year-on-year to 8.593 million tonnes.
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