Ferrous Report

FERROUS SCRAP>> ITALY, TURKEY>>Ruggero Alocci, ALOCCI RAPPRESENTANZE INDUSTRIALI

The prevailing fear is that the problems facing the Eurozone will be hard, and that those problems will slow down the global economy.

The Eurozone’s weakness is hindering U.S. exports; and there are some signs the U.S. economy may start to slow in the second half of the year. China’s strong growth rate, seen during the first quarter of the year, is probably unsustainable. The Chinese are now attempting to cool their markets, which will limit consumer financing activities.

Global markets are currently fearful, and volatility is heightened for many reasons. Steel production will be influenced by the general market situation, which now seems negative. In Italy, after three months of positive crude steel output, the situation has changed. Lower long product demand is reducing mill production to around 50 percent of capacity. This is lowering scrap demand and prices for the material.

In Italy, steel mill inventories have improved due to the arrival of around 80,000 metric tons of pig iron, 95,000 metric tons of scrap and 10,000 metric tons of hot briquetted iron.

Scrap exports to Turkey are around 15,000 metric tons. However, there is a trend toward lower scrap collections due to a slowdown in the manufacturing sector.

For June, prices look to be trending downward as mill demand softens. Meanwhile, pig iron and hot briquetted iron are coming in at a stable volume. Sellers expect it to be a challenging market as it is difficult to reduce inventory levels due to the high iron ore and coking coal prices. HBI prices also are facing the same problems. For steel, long product prices are following the raw materials weakness. There does seem to be better strength for coils, beam and pipes.

Ruggero Alocci can be contacted at mail@alocci.com.