Supplies to the metal plants. Scrap supplies continue to decline due to low prices, weak scrap procurement in the regions, as well as players' expectations of a quick increase in purchasing prices. Over the last week, about 41 thousand tons were delivered, which is 13% less than a week earlier.
Remains in the ports of Ukraine. Scrap stocks in the ports of Ukraine have slightly decreased and currently amount to 5.5 thousand tons.
Dynamics of steelmaking. Steel production has been declining for the fifth week in a row. Over the last week, about 400 thousand tons were produced, which is 3% less than a week earlier.
The balance of scrap at the plants. The level of satisfaction of the needs of metallurgical plants for imported scrap amounted to 74%. Deficiency increases, forcing factories to consume stocks.
Stocks of scrap at iron and steel works. Remains of scrap in the warehouses of factories sank to 170 thousand tons. The current value of reserves is the minimum in the last three months. The indicator of stocks in the days of work was 21 days, which is almost two times higher than the standard value.
Forecast domestic and export prices for scrap. In the coming weeks, steel mills will begin to increase procurement prices in the domestic market due to rising prices for metal and a catastrophic decline in scrap harvesting productivity. The forecast average price next week is 6400 UAH / ton.
In February, an increase in demand for scrap metal is expected due to the expectation of the intensification of the construction segment, and with it the demand for rental, in the regions of Middle East & North Africa. In addition to the factor of increasing demand, the supply of material will also be limited against the background of continuing negative impact of the seasonal factor and difficult conditions of material delivery. Despite the presence of a fairly significant number of factors, the growth rate of prices in February will not be significant due to the growing resistance of importers, due to the fall in the profitability of the rental trade. Even temporary withdrawal from the market of individual players in the hope of stopping the growth in the value of scrap metal is not excluded. The forecasted price range for scrap in February is $ 300-330 / t cif
The review was prepared on the basis of the data of the State Enterprise “Ukrpromvneshnekspertiza”.
