Genoa — The bulk carrier ship breaking activity influences the steel production twice, in term of iron ore / coal dry bulk shipping tonnage supply and in term of scrap generation. Dry bulk carrier worldwide scrapping volumes slowed down in 2013 with 22.4 million deadweight against 35.2 million of the previous year. 426 bulk carriers were sent for scrapping in 2013, about 30 percent less than 2012. The top five ship breaking countries – India, China, Bangladesh, Turkey and Pakistan – scrapped more that the 95 percent of the total number of End of Life ships. India saved its leadership in term of tonnage and bulk units broken up, even if its whole scrapping activity suffered a fall.
The accelerated deliveries of new buildings during the 2013, combined with the declining trend in ship breaking activity, made an additional bulk carrier tonnage availability, maintaining the freights at low level. The 2014 seems to confirm this trend, with 177 new ship contracts placed to the shipbuilders and 36 EoL units sent to demolition during the first two months. The larger bulk carrier’s availability and the lower steel raw materials volumes to be transported are strong issues for the ship owners, who are suffering for the inadequate return of their investments.
During March the Italian mills fought a lot with the suppliers to reduce their purchase prices, facing their sale short order books and weaker prices. After long talks, they settled the monthly contracts from the foreign suppliers with price reductions from €15 to €20. On the domestic market the weekly prices moved down of about €15 during the first two weeks and later they remained stable. Only some small increases are reported at the end of the month, basically justified by the higher prices paid by the Turkish buyers on the international market for their import. The deliveries have been lowered compared to the previous month, due to the long deals and the low prices paid by some mills. The arrivals at the Italian ports have been remarkable: abt 45 Kt for scrap, abt 175 Kt for pig iron and abt 72 Kt for HBI. In spite of the strong arrivals by vessel and the always low steel production the Mills inventories at the end of March were scarce. Waiting for the seasonal better demand of rebars and long steel products, mills are trying to increase their sale price of abt 20/30€ pmt.
Following the March official average prices reported (€/pmt delivered):
New arising :
Demolition scrap E3:
The forecasts for the April contracts are contrasting. The new purchases of the Turkish mills are putting again pressure both on the USA and EU market, raising the prices. The low mills order books and the several holydays in April will justify the temporary stop in production for around 10 days. Prices will have to face these situations, with the possibility of small adjustments upwards.
Some more info about the Ilva Taranto. The cleaning-up and revamping works are moving forward even if conditioned by the Ilva’s late suppliers payments, due to a complicated financial situation. The Commissioner, who has just received the approval for the full environment works plan, is now putting his efforts to complete the new business plan that will be presented to the Italian Government for the final approval. After this step, which will cause significant changes in the way steel will be produced at Taranto in the short future, the current shareholders (the Riva family) or new ones have to provide for the needed financial resources, in time. „Not an easy job!“, commented Ruggero Alocci.
PIG IRON – H.B.I.
The pig iron arrivals reported, around 155 kton, are not too far from the 2013 highest. It means that the Russia / Ukraine issues did not influenced the deliveries from the Black Sea ports. The pig iron inventories at ports and mills are always well recovered. The last pig iron offers are quoted around $405/410 pmt CIF for April/May shipment, but the buyers aim is to pay lower than $400 for their new purchases. Libyan HBI returned on the market with some quantities for April shipment. Also the Russian HBI is always on the market. Last offers are reported around $ 360/365 pmt CIF Italy.
Source: Alocci Rappresentanze Industriali