ISTANBUL Turkish demand
for U.S. ferrous scrap will grow in the coming years as
supplies from another major exporting region decline, according
to an industry executive.
Black Sea scrap exports from
Russia and Ukraine to Turkey are falling, Yusuf Guven, director
of Geneva-based Helveco Intertrade SA, told delegates at
AMM sister publication Metal Bulletins
Steel Success Strategies conference in Istanbul. "The main
reason this is happening is their own need. Domestic demand for
scrap is increasing as production is increasing."
As a result, Guven predicts
demand for scrap from the United States and elsewhere in North
America will increase in the near term.
A market participant from Russia
agreed with the outlook, but said he wasnt sure if the
United States could bridge the gap. "The scrap reservoir in
Russia decreased significantly and consumption is increasing,"
Yuri Mishin, director of trade policy at Moscow-based
Metalloinvest Holding Co., said. "I dont know if the U.S.
can keep up its high recycling rates, so I think its total
export volume could drop. In times of high prices, you take
more from the scrap reservoir, and its difficult to
maintain that rate, especially when prices soften."
If U.S. and Black Sea exports
drop in the coming years, Turkey could turn to China as a
supplier, he added.
Alberto Hassan, president of the
International Iron Metallics Association, said that overall
U.S. scrap collections are set to decline in the coming years
as the metal mix in auto production changes.
"The average life of U.S. cars
on the road has increased to between 12 and 18 years now due to
reuse. Cars are also lighter today and carry more nonferrous
material and galvanized steel. As these cars enter the
recycling stream in later years, there will be less steel scrap
generated," he said.
Chinese and Indian scrap demand
also could rise this year as steel consumption is projected to
grow about 4 to 5 percent.
Jiang Li, chief market analyst
at Shanghai-based Baosteel Group Corp., said that Chinas
apparent steel consumption will rise in 2013 because it is the
first year of a new government. "Normally, fixed-asset
investments are higher in the first year of a new government,"
she said. Li added that restocking will be another demand
In India, nearly 25 million tons
of new capacity projects are underway and current mills will
run at 88 percent of capacity, according to Ravi Uppal,
managing director and chief executive of New Delhi-based Jindal
Steel & Power Ltd. "Growth in demand for steel (in) India
will be 55 percent in 2013, and Jindal will double its capacity
by the end of this year from 3.2 million tonnes per year to 7.1
million tonnes and then to 12 million tonnes by 2015," he
New capacity build-up in India
by large producers such as Mumbai-based O.P. Jindal Group,
Mumbai-based Tata Steel Ltd. and New Delhi-based Steel
Authority of India Ltd. will add 25 million tonnes to
Indias production capacity by 2015, according to
"We are in (a period of) major
infrastructure growth, and the government of India has
allocated $1.6 trillion for infrastructural projects," he