Global scrap metals market continued to show weak trends, weak dollar made US scrap metals attractive for buyers. Prices are being pulled in both directions, observes The Steel Index
NEW YORK (Scrap Monster): With the weakening of the dollar, the Japanese reconstruction demand for metals yet to pick up, lack of of demand for steel longs form the Middle East and North Africa created a stable to weak trend in global scrap metals prices, according to a monthly analysis from The Steel Index (TSI).
Weak dollar made scrap purchases from USA attractive for Turkish buyers and on perception that US origin scrap was of higher quality, TSI Monthly Review said. Although the month of April began on a weak not for Turksih scrap industry, it recovered with more than 250,000 tons of dea-sea cargoes booked by month end. "Many had anticipated an easing of the price for scrap, hower, market fundamentals are now pulling the prices in both directions," TSI said. Margins between Heavy Melting Steel (HMS)1&2 70:30 and 80:20 materials widened to US$15/t.
Flat steel producers were more active than Turkish long producers who faced ongoing problems finding new markets to replace diminished MENA exports. However, long product steel mills came back strongly after mid-month, buying up large tonnages after a period of calmness, with pricing differentials consistent throughout the various grades. Traders held firm views on prices and this translated to uniformity in the US and Europe
In the US market, scrap metals prices prices had an uneventful month. As April began, the price slipped slightly, falling US$1/l.ton. "Exports helped to relieve pressure on the domestic market. One of the after-effects of
the Japanese earthquake was that some exporters were anticipating a ramp-up in Asian demand. Domestic steel prices started to dip, with Hot Rolled Coil (HRC) starting the downward trend in the last week of March. Spreads to US domestic scrap were considered high and market surveys showed the majority of suppliers felt quite bearish on steel prices, TSI Monthly said.
Indian imported scrap metals market lacked clear direction and was weak in April beginning as buyers eyed the developments in Turkey and China scrap metals market. Higher steel pirces specially longs cuased purchase prices of billets to strengthen and traders were cautiously optimistic of better demand.
Billet producers have kept prices relatively stable, with only a few small price hikes reported around India.The largest producers are yet to announce their May prices, which led to the scrap price staying steady, TSI report said.
Many buyers still hold the belief that prices will weaken in the coming months. Indian integrated steel producers may feel their margins squeezed in the upcoming month, as new contract prices for coking coal come into effect. With India importing over 70% of their coking coal, steel prices may feel upward pressure as domestic BOF producers attempt to pass on rising costs.
Turkey has recently hiked its rebar prices with the domestic construction sector seeing a lot of strength. Sources state that the recent purchasing has all been directed towards consumption, not restocking, which is positive news
for mills planning their forward sales. One question mark is whether we will see increasing strength in the US dollar beginning from May. PMI continues to show good underlying strength in the economy whilst, in Europe, patches of weakness remain stubbornly entrenched in some countries, TSI Monthly added
Member