FERROUS SCRAP>>EUROPE/ITALY>> Ruggero Alocci, Alocci Rappresentanze Industriali
It is time to make some comments about the ending year, and easy to say that 2010 has been better than the 2009 “annus horribilis.” But we are still suffering from a very fragile and slow recovery in the developed countries.
The better performances of the emerging economies are supporting us at present, but the question is: Is their development enough to drive our countries out of the recession or not? How long do we have to wait for the return of the pre-crisis level? Several negative signals are there for us in the coming year: the low U.S. and E.U. growth rate, the disappointment of unemployment rates, the always risky real estate trends, the sovereign debt of some E.U. countries and others. As foreseen, increases in scrap prices, helped also by the negative weather conditions, are supporting the sale of steel products. It is a positive sign for all the steel chain operators.
Here in Italy, the weekly domestic prices continued the increase started during the second half of October, by important figures, up €40 to €50. The monthly contracts with the usual European suppliers have been settled with about a €25 to €30 increase, after some early resistance by the mills. Scrap demand is divided in two: higher from the flat and engineering steel producers, lower for the billets, rebar and profile makers. The low scrap arising, the negative weather conditions and some railway difficulties are limiting deliveries to the mills. About 26,000 tonnes of scrap has arrived by vessel as well as 105,000 tonnes of pig iron and 30,000 tonnes of HBI.
In November, the average prices reported in euro per metric tonne delivered for new arising E8 was €305 in Italy and €300 in Germany. Shredded E40 was €300 in Italy and €295 in Germany, and demolition scrap E3 was €255 in Italy and €260 in Germany.
Prices in December are expected to increase further, following the mills’ demand and the international markets. Also the weaker euro against the U.S. dollar will support European scrap prices. Domestic prices will be cooled by the scheduled stoppages of production of from one to three weeks.
For the first time this year, we report the pig iron monthly arrival at more than 100,000 tonnes. It is also important to say that the larger quantity has been received by domestic traders to be resold later—maybe they anticipate better demand from end users. The stocks at the ports are important. Last offers are reported at more than $490 per tonne CIF (cost, insurance and freight) for January shipment. Also, the HBI arrivals have been important, but all of these have been directed to end users. Steel prices are increasing, following the scrap, but sales volumes are weak for billets, rebar, beams and profiles.
Ruggero Alocci can be contacted at mail@alocci.com.