Current Scrap Metal Prices

During recent two weeks the quotations for both flat and long products in EU increased by 50-70 euro per ton. In particular, HRC price last week amounted 480-500 euro per ton EXW; commercial plate price was almost at the same level, although some manufacturers offered it at 530 euro per ton EXW and more.

However, these quotations seems to grow old already, since CRC and galvanized steel, offered by European companies last week at 550-560 euro per ton EXW, increased to 570-600 euro per ton EXW. Rebar was quoted in the middle of March at the level of 460-470 euro per ton EXW, but some manufacturers then increased the prices to 490-500 euro per ton EXW. This jump was made against weak demand and end users inactivity, which switched to the survival regime from the very beginning of the prices increase. In general the depression continues in European steel products market. Except automotive manufacturers, who receive state support in many countries of the region, there are no “growth zones”. The exceptions, like Poland, where the preparation for Euro-2012 is held, only confirm the rule. Loan activity of the banks remains half-paralyzed. It is still very difficult for small and medium companies to receive financing. Investors and experts are very concerned by the problems of Greece, which has been on the default edge for several months, and by huge budget deficit in UK, Spain, Portugal, and Germany.

That is why real demand for steel products in the EU remains low. Although the stockpiles level in the region is insignificant, the traders also do not hurry with the purchases. Many specialists forecast soon prices fall due to the oversupply. Despite negative market conditions, leader European metallurgical companies did not refuse their plans to restart the capacities suspended in 2008 and 2009.

The price for Russian HRC reached $685-700 (500-510 euro) per ton CFR as early as in the middle of March and in recent days it exceeded $700 per ton CFR. Import prices for CR and galvanized steel and plate are not lower than EXW prices of European manufacturers. That is why there are almost no contracts on steel products import.

In the first half of march European companies counted on cheap Chinese rolled steel supplies. However, Chinese exporters are not very much interested in European market today; besides, their prices $630-650 per ton FOB are almost similar to Russian ones. Ukrainian companies offer HR steel at $600-610 per ton FOB, but the sales volumes to Europe are limited. Thus the behavior of European companies does not look something extraordinary in today’s steel market. Everybody increase the prices despite the demand level. But, due to the insufficient consumption level the markets are unlikely to keep the level announced by the manufacturers. The metallurgists will have to cede. However, current unproved prices increase has sense after all. Increasing he prices today, the manufacturers leave the gap for bargaining and discounts in future.

excerpted from www.rusmet.com