Genoa — Following the attendees conversations during the last BIR Prague convention, the mostly heard question was “Is the ferrous scrap price at the bottom or not?”. No one had the correct answer, but it could be helpful to remember what was taught several years ago: An empirical formula to determinate the metallic value of the ferrous scrap is something like “three times the iron ore price”. Following always the empirical calculation the billet price is something like “scrap plus 100$” and again rebars price is “billet plus 50$”.
Clearly it is only a rough indication, but using this criteria to compare the current prices, it can be underlined that billet and rebars are not too far from the market prices (i.e. the ones from China), while scrap seems, so far, are a little bit overpaid. Maybe it is not completely the right answer, for sure not the one wished by the recyclers, but in any case this can suggest something. The effects of the always more aggressive Chinese export of semis and steel could twist the worldwide steel production and also several old certainties.
In Italy, the October scrap prices moved down around 20/25€ on the domestic market, where the mills are always buying on spot basis to cover their low needs. The monthly prices for the contracts settled with the European suppliers fell around 30/40€. It means that during the last four months prices have fallen around 80/85€, both on the domestic and import market. During the same time, the volumes purchased by the mills have been lower than the ones of H1. The steel makers are always facing the competition of the cheaper import of semis and coils from China and Black Sea. The end-users are postponing their inventories replenishing. Private and public investments in new building constructions are still far away.
November productions are forecasted on the same October level – more or less the 50 percent of the mills capacity – and for December two or three weeks of “forced holydays” are expected. The arrivals at the Italian ports in October were abt 5 Kt for scrap, abt 110 Kt for pig iron and abt 55 Kt for HBI. Mills inventories are covered enough, while the scrap yards inventories are suffering the low old scrap generation and the lower than the previous months new scrap collection. Some delays in mills payments are always reported.
Following the October official average prices reported (€/pmt delivered):
New arising E8:
Demolition scrap E3:
Mills are oriented to a further “small” price reduction for their purchases in November, taking into consideration their very low order books. At the same time both mills and scrap suppliers are paying serious attention at the last movements on the Turkish market, where mills placed their last purchases at slightly higher prices during the last ten days. The question is: Are we facing a fast rebound due to the expected restocking needs or it is the start of a new positive trend?
Pig Iron – H.B.I.
The HBI arrivals at the Italian ports during October have been limited to one cargo from Venezuela and one from Black Sea. Last HBI offers are reported around 175$ pmt CIF Italy. After the lower pig iron September arrivals, the ones of October got back to the standard volumes with about 110 Kton. The last pig iron offers are quoted around $190 pmt CIF for December/January shipment. The inventories at ports and mills remain well recovered.
Source: Alocci Rappresentanze Industriali