Between 16-23 January 2023, HMS 1/2 scrap prices in the Turkish market decreased by $3/ton compared to the previous week, to $408-410/ton. Thus, scrap metal prices decreased for the second week in a row.
The demand for scrap from Turkish consumers has fallen sharply. At the beginning of the year, Turkish steel producers replenished the minimum required stocks of raw materials, so now they have the opportunity to avoid purchases and reduce the cost of raw materials in their favor. In addition, the low demand for steel did not contribute to the increase in demand for scrap.
Scrap prices in Turkey increased slightly over the past weekend, following two new contracts with US and Baltic suppliers, which were awarded above the current price range. This helped the market to prevent the offer from falling further.
In the short term, scrap prices are expected to decrease to $400/ton due to market oversupply. If the demand for processed steel improves, scrap prices may return to rising.
Scrap prices in China remained stable ahead of the New Year holiday. Some steel companies have stopped purchasing raw materials because they believe that the prices are not in line with the market situation. East China scrap quotations remained stable at 3.04 thousand yuan/ton ($448/ton), unchanged from the previous week, as of January 20, 2023.
Most of China's electric steel mills have stopped production ahead of the New Year holiday and rising demand, and plan to resume operations in early February.
In the first half of 2022, world scrap consumption decreased by 8.4% compared to the same period of 2021 to 248.79 million tons. The negative trend in scrap demand was supported by the decline in global steel production.
In 2021, the world consumption of scrap metal in steel production increased to 620 million tons. During the year, the share of scrap in steel production increased to 32%, while in 2019 it was 30%, and in 2020, at the peak of the pandemic – 29%.
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