In the first week of July 2024, global scrap prices experienced slight increases or remained stable across most regions. Market participants largely predict that prices will remain unchanged in the short term, as there are no substantial factors driving a stable price trend.
In Turkey, prices for HMS 1&2 80:20 scrap increased by 2.6% in June and stabilized at $390 per tonne CFR as of July 8, with minor fluctuations within $2 per tonne due to low demand from steelmakers. Turkish steel producers have already secured their raw material needs for July and are adopting a wait-and-see approach, with few orders for August.
Local steel mills are pressuring suppliers by highlighting the weak markets for steel and scrap. However, suppliers argue that scrap prices are unlikely to decrease soon due to challenges in raw material collection. Additionally, steel producers face high production costs, especially from energy prices, and do not foresee an improvement in the steel market’s outlook.
Turkish steelmakers are expected to re-enter the market to purchase August cargoes soon. Although mills are trying to push prices down, latent demand will likely stabilize prices at $390 per tonne or lead to an increase within $10 per tonne.
In North America, HMS 1&2 Scrap (80:20) prices have risen by 0.6% to $364 per tonne since early July, following a 2.3% increase in June. The current price is the highest since early April. Sentiment in the US scrap market remains weak in July, with negative forecasts prevailing due to lower domestic steel prices and canceled deliveries of previously ordered steel products. Prices for high-quality scrap are expected to remain stable, while lower-quality grades may fall by up to $20 per tonne.
The European scrap market shows mixed trends. In Germany, E3 scrap prices rose by 1.4% since early July, while in Italy, E8 scrap prices fell by 5% to €360 per tonne and €380 per tonne Ex-Works. Despite the slight increase in Germany, the market remains stable due to steady domestic and export demand. Trade volumes are low, particularly as the German automotive industry consumes less steel due to reduced production, impacting scrap demand. However, some export orders to Turkey at slightly higher prices prompted German steelmakers to return to the market for raw materials before the summer vacation.
Most participants do not expect changes in German scrap prices in the coming weeks, but rising export demand could lead to some increases. In Italy, scrap prices fell due to low sales of flat and long products, with steelmakers pressuring suppliers to restore profits. Some steelmakers are cutting back production to balance supply and demand, indicating prolonged maintenance shutdowns in August. The third quarter is expected to be challenging for the scrap market due to reduced end-user activity.
In China, scrap prices have risen slightly since early July by 1.3% to $377.3 per tonne. In June, prices fell by 3.1%. The recent price increase is due to reduced supply caused by adverse weather conditions affecting raw material collection and delivery to steel mills, leading to shortages in some regions. However, rumors suggest that steel mills in Jiangsu received notices of power supply restrictions, which may reduce production and raw material demand, restraining any significant price increase in the short term.
While slight fluctuations and region-specific trends are observed, the global scrap market remains relatively stable, with no significant price increases expected in the immediate future.
Source gmk.center
