Scrap Prices Keep Moving Higher
According to The Steel Index (TSI), "weekly Turkish scrap price for Heavy Melting Scrap 1&2 (80:20), delivered on a CFR basis, today rose to US$507/tonne after another busy week of buying. This represents an 18.2% increase over just four weeks.
The index level has now increased for seven consecutive weeks and has been on an upward trajectory since 15 October last year.
“The last quarter was characterised by low mill stocks and bad weather in Europe which culminated in buyers having to accept ever increasing prices for scrap. Not much has changed as we enter the New Year” notes Jarek Mlodziejewski, an analyst at TSI. “Volatility levels like this may well encourage companies to explore the newly-available hedging possibilities for scrap, through OTC swaps clearing on LCH.Clearnet”.
TSI’s Indian scrap series... hit its highest level for 16 weeks, reaching US$469/t. The series tracks containerised imports of shredded scrap on a CFR basis into Nhava Sheva port on the West Coast and rose US$13/t this week, up 11.9% month-on-month.
TSI’s US domestic shredded series, currently under development, also hit its highest level in 42 weeks, reaching US$477/long ton, delivered mill.
“Global scrap markets are seeing a perfect storm” reflects Tim Hard, manager of TSI. “The finished steel prices we track around the world are uniformly rising, giving more space for scrap prices to increase. In turn, seasonal constraints on flow, as well as robust export demand, are all providing tailwinds to US and European scrap sellers, driving the cost-push story onwards. Other raw materials such as iron ore and metallurgical coal are either seeing good demand, or constrained supply. TSI’s iron ore price rose over a dollar today to US$172.6/dmt, CFR China.”