Market Report: Ferrous and Nonferrous

Market Report: Ferrous and Nonferrous

Market commentary from Peter Mathews, Black Country Metals.

The European market especially is quite low at the moment. Demand for steel scrap is not strong and hasn’t been. We’re seeing lots more tonnage and many more containers being loaded for the Asian market, especially India and Pakistan, with Indonesia and Vietnam playing a part as well.

Not so many containers go into China’s market from Europe. But European demand is still low, and industrial production is quite low as well. There is less scrap coming into yards, and we anticipate that it going to continue for the foreseeable future.

There is concern about Spain’s economy, so that’s affecting confidence in the market quite a bit. There is nervousness about the Spanish banking system and if the Spanish have the same problems as Greece had. But the headline concerns of the Spanish fiscal market have ebbed away a little bit during the last few weeks.

Turkey for us is still a major player because of its demand for steel scrap. It ebbs and flows quite a bit. Anything in the market today is a bit uncertain. We don’t really know as we used to know what’s going to happen in September. The market will usually pick up in September. We don’t know what is happening at the moment. There’s not a lot of movement yet. There’s been a small bit of strengthening in the prices, I think based on the demand in the Asian market.

I think there was some material exported into the United States early on this year. I haven’t heard anything recently.

We see demand in the Asian market yet again for honey brass and grades like that, and aluminium prices have moved up noticeably in the past couple weeks. We’ve seen a rise of $100-plus per ton. Demand in the Asian market is good and that actually is holding the market together for Europe as well.

The demand for finished aluminium, brass and copper within the U.K. and Europe is not as high as it used to be. The biggest scrap tonnage is being exported a little more than before. Local markets are buying what scrap they need, but there’s no real strength in this market in the European manufacturing base like we had before the recession of 2008.

We have interesting times in front of us. In Europe, we have some problems with the euro and manufacturing is going to continue to be at a relatively low ebb for the foreseeable future (the next 12- 18 months or so). Everyone is looking to see what’s happening in the United States, so it may be a mirror image in the North American and European markets. Without the Asian market today, I think we’d be having more difficulties. We are seeing certain markets change a little bit. The Ukrainian and the Russian markets are getting stronger. It is going to be quite interesting for us all to keep an eye on this and to see where we are going to be shipping to next.

Peter Mathews of Black Country Metals Ltd. can be contacted at peter@bcmetals.com.

Market Report: Ferrous Scrap, Russia and CIS

Andrey Balashov of TYOR Commercial Inc. provides commentary.

We have here in some areas of Russia record heat close to 30 degrees Celsius (86 degrees F) during the day, and this affects scrap collection greatly. The temperatures are very hot, and for a lot for normal people life is terrible.

On the other hand, metals are trading at higher prices from month to month. So, for the whole of July, we are looking at growing prices. Now everyone is expecting prices to go further up. Steel mills are paying very healthy prices. Domestically, most steel mills are paying on time and paying directly upon receipt of material. The result is we have big deficit of scrap right now.

Unlike some other parts of Europe, business still goes on in August. Governmental appointments still go on. The Olympic Games are getting close, so they have to build a lot, meaning there is a demand for steel in Russia. So demand for steel scrap is stable, and collection is difficult in the heat.

Export is limited because of dues or fees; many will not touch it. But in the last week, demand from the Turkish market has increased significantly and export activity has started to increase again. Before that we had seen very small flows to export. Using the port of Novorossiysk as an example, shipments from there went down to a low of 500 tons per day. A normal amount there might perhaps be shipping 3,000 tons per day. The main export destination remains Turkey.

Andrey Balashov can be contacted at balashov@tyor.com.