Bumping along

The summer vacation season in Europe provided its usual slowdown in industrial activity. Economists, however, are more worried about whether the European economy started slowing even before the summer vacation season began.

The ferrous scrap market in Europe has not yet tipped its hand toward a recession. Pricing in Europe did not head dramatically downward in either June or July, according to EUROFER, the Brussels-based European Steel Association.

The three grades of scrap with pricing tracked continentwide by EUROFER (demolition scrap, new arisings and shredded scrap) all have held within a steady, narrow range from April 2014 to July 2014.

EUROFER’s shredded scrap index figure checked in at 262 in April, 262 in May, 259 in June and then back up to 262 in July. The other two grades displayed similar patterns.

Industrial production numbers in the EU for 2014 are showing a slowdown in many Western European nations, while most Eastern European nations are showing healthy production numbers.

To the extent that European metals recyclers can find ferrous scrap to process and sell, the world’s steelmakers have contributed to a steady demand climate, according to figures collected by the World Steel Association (WorldSteel), Brussels.

In the first half of 2014, the world’s steelmakers churned out 137.1 million tonnes of steel, an increase of 3.1% over the 133 million tonnes produced in the first half of 2013, according to Worldsteel.

Among steelmaking nations with a scrap deficit, Turkey’s output is up by 6.7% thus far in 2014, Egyptian production has improved by 9.5% and output in Iran is up by 7.1%.

Seasonal interruptions caused supply, demand and pricing fluctuations throughout the summer months. Ruggero Alocci of Genoa, Italy-based Alocci Rappresentanze Industriali says the observance of Ramadan in Turkey caused buying from mills there to taper off in July, while summer holidays in Europe resulted in lower scrap arisings throughout much of the EU.
 

Trans-boundary shipments of ferrous scrap remain muted, if figures collected by the U.S. Geological Survey serve as any indication.

In the first five months of 2014, the U.S. shipped out 6.32 million tonnes of ferrous scrap, down 25.8% from the 8.52 million tonnes exported in the first five months of 2013.

Turkey is among the nations buying less U.S. scrap, with its import volume dropping 38% to 1.48 million tons purchased from the U.S. in the first five months of 2014.

Chinese mills also are showing less interest in U.S. scrap, dropping from 898,000 tonnes bought from January to May 2013 to 335,000 tonnes purchased in the same period of 2014. India has cut its shipments by more than half to 150,000 tonnes in the year-to-date comparison.