SHANGHAI Ferrous scrap
participants globally are bracing themselves for a weaker
market for the remainder of 2013 against slow demand in the
steel sector, a theme that dominated proceedings during a
session at this weeks Bureau of International Recycling
(BIR) conference in Shanghai.
"The mood for many of us in the
steel recycling industry is not so optimistic anymore,
especially for those who do their business in Europe,"
Christian Rubach, president of BIRs ferrous division,
Europe is the biggest recycling
sector in the world but has suffered considerably from the
financial crisis, austerity programs and low consumption, he
Tom Bird, president of the
European Ferrous Recovery & Recycling Federation, said
scrap continues to be offered in abundance to Turkeythe
worlds largest scrap importerfrom Europe, the
Baltics and the United States, prompting weaker prices.
"As always in a market such as
this, what appears to be a distress sale today turns out to be
a good deal tomorrow. Prices have continued to weaken during
the month and we could see further reductions for June across
the board. We are seeing prices continue to soften into both
Turkey and Spain, driving the EU market down," he said.
He said 2013 was proving to be a
difficult year for ferrous scrap recyclers.
"After a fairly positive start
to the year, the market has gradually tightened through April
and May. A great deal will depend on steel demand moving
forward, but the reality is the remainder of 2013 poses a
challenge," Bird said.
Japan, on the other hand,
appeared to be the only bright spot in a market where prices
seemed to be heading lower worldwide.
Scrapyard dealers are getting
quite a lot of inquiries, with the current weakness of the yen
favoring exporters, according to Metz Corp.s Hisatoshi
Kojo, a board member in BIRs ferrous division.
"With the weaker yen, Japanese
scrap appears to be a good bargain on a U.S.-dollar basis, and
there are inquiries received from Taiwan and Vietnam. Indeed,
the conclusion of a contract was reported at $360 to $365 per
tonne c.f.r. for May/June shipment," he said.
Consequently, there were
movements from mills in South Koreathe largest buyer of
Japanese scrapto raise their bidding prices to 32,500 to
33,000 yen ($325 to $328) per tonne f.o.b., he said.
Blake Kelley of Sims Metal
Management Ltd. noted that while the weaker yen encourages
exports, it also makes imports of iron ore and coking coal
relatively more expensive, so increased domestic scrap
consumption in Japan may result.
Kojo noted that Japanese
blast-furnace-based mills have restarted purchases of domestic
prime grade scrap since April.
A version of this article was first
published by AMM sister publication Steel