World marketThe situation on the world scrap metal market in August - early September improved somewhat. Raw materials rose in all key markets. The scrap price of HMS 1 & 2 (80:20) increased to $ 290 / mt CIF, which is $ 15 per ton higher than in early August. The cost of raw materials in the key benchmark - the Turkish market - for the first time since January this year reached the psychologically important indicator of $ 300 / mt CIF.
This situation is caused by the recovery of the world economy and metallurgical production after the abolition of strict quarantine measures, as well as the replenishment of raw materials by large consumers at affordable prices. In particular, Turkish metallurgical enterprises in January-July increased their import of scrap metal by 11.4% - up to 12.1 million tons.
It is expected that in the first half of September the pricing in the scrap metal market will be directed upward. However, in the second half of the month, prices may start to decline due to the deteriorating market conditions in the flat-rolled steel segment and large stocks of raw materials created in July-August. The forecast range of prices for metal in September is $ 285-300 / mt CIF.
Domestic market
The domestic market continues to show negative dynamics, which is associated with a general decline in production in the Ukrainian metallurgy.
The main indicators of the scrap metal market for 8 months of 2020 showed the same decline dynamics:
• procurement of scrap metal decreased by 13.9% - to 1.9 million tons;
• shipments of scrap metal decreased by 13.4% to 1.8 million tons.
The decline in steel production over the same period was less significant - 6.2% (to 13.7 million tons).
Other current indicators of the domestic market indicate both a slight improvement in the demand situation and signs of a shortage of raw materials among consumers (situational indicators):
• shipments of scrap metal to metallurgists in August amounted to 248.5 thousand tons (+ 29.3% compared to August 2019);
• the level of metal scrap metal supply for steelmaking enterprises - 90% (as of the beginning of September);
• stocks of scrap metal at metallurgical enterprises - 110-115 thousand tons (as of the beginning of September).
In August - early September, domestic prices for 3A scrap to $ 250 / mt CIF, which is $ 15 per ton more than in early August.
According to the updated balance of the formation and consumption of scrap metal, by the end of the current year, the procurement of scrap metal will decrease by 20.2% - to 2.68 million tons, the supply of raw materials to metallurgical enterprises - by 12%, to 2.65 million tons.
Export - Import
The situation in the export of scrap metal continues to stagnate due to the established protective duty of € 58 / t.
For 8 months, the supply of raw materials to foreign markets decreased by 44.4% - to 20.6 thousand tons. It is expected that the export of scrap metal from Ukraine by the end of 2020 will amount to 30 thousand tons, which is 26.6% lower than in 2019.
At the same time, the import of scrap metal over 8 months decreased by 71.4% - to 12.1 thousand tons. It is expected that by the end of the current year it amounted to 30 thousand tons (-37.1%).
In the foreseeable future, the situation with the dynamics of exports and imports of scrap metal will remain unchanged.
Source: State Enterprise "Ukrpromvneshexpertiza", "UAvtormet"
