CRU: Weak Demand Pushes Global Scrap Prices Down

Metallics prices have fallen in most global markets over the last month, driven by weak steel demand and improved metallics supply. Lower finished steel prices and EAF margins have weighed heavily on metallics prices across major markets. Scrap bids from key buyers have reduced further amid ample availability, while recent pig iron price cuts have triggered production curtailments. Accordingly, the CRU metallics price indicator (CRUmpi) for June fell by 5.9% month-on-month (MoM) to its lowest value in 2023.

Asian prices have been more resilient than those in Europe and the US due to relatively constrained supply. Meanwhile, global prices of ore-based metallics have seen sharper MoM drop than that of scrap, following improvement in trade flows. Weak construction steel demand, low steel prices and lower margins have caused EAF operating rates to fall across key economies, while scrap generation continues to grow due to seasonal factors. The resultant rise in availability has caused scrap bids to turn lower, eventually exacerbating downward pressure on ore-based metallics prices.