CMC: Major drop in US scrap prices not “unreasonable”

Sat, 29 October 2011

During Irving, Texas-based Commercial Metals Company's (CMC) quarterly conference call, President and CEO of CMC, Joe Alvarado, acknowledged that after a drop in US domestic scrap prices in October, the expectation that scrap prices could drop as much as $40/mt in November is "unreasonable." Other global raw materials prices such as iron ore have already declined significantly in recent weeks and months, but US scrap prices have been pretty steady over the last nine months. Alvarado noted that "2011 was an unprecedented period of scrap stability," but he wouldn't count on the same scenario for 2012 given the long history of scrap pricing.

CMC's Americas Recycling segment had an operating profit of $10.8 million in Q4 2011, a $5.6 million increase compared to the same period in 2010 due to higher average selling prices and higher shipments.

Tags: scrap , USA , raw mat , North America , steelmaking , fin. Reports

sourced: steel orbis

Tokyo Steel raises scrap price as supply stays tight

15 February 2011

Tokyo Steel raised scrap purchase prices for most of its works for the first time in three weeks as domestic availability remains tight. The price rise defied gathering expectation of a pull-back in scrap prices across Asia, and follows the first fall in Japanese scrap export tenders in four months. Japan's biggest EAF-based producer and scrap price-setter left purchase prices for its..


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Tag:Tokyo Steel , scrap , Japan, scrap prices, tight supply, EAF based producer

Sponge iron prices rise 20% in a month

January 26, 2011

sourced Business standard by Dilip Kumar Jha & Shubhashish
The prices of sponge iron rose by nearly 20 per cent in the past month in line with similar rises in the prices of other steel making raw material, including iron ore and scrap.
On Friday, sponge iron prices in Raipur, Chhattisgarh, India’s largest producing hub, is quoted at Rs 21,000 a tonne, from Rs 16,500 a tonne about a month earlier. The commodity slipped marginally from its peak at Rs 22,000 a tonne yesterday. Producers and traders attribute this price rise to an all-round appreciation in finished steel products and raw materials.

Post-monsoon construction activity began with a lag of a month due to an extended rainy season. So, projects in this sector are behind schedule, creating a rush for completion. As a result, demand for construction-grade steel has suddenly surged. Vipul Agarwal, director (finance), Prakash Industries, said, “Sponge iron prices have spiked by over 20 per cent in the past month or so and looks likely to continue to move upwards.”
The cost of production of sponge iron for Prakash Industries is around Rs 12,000 a tonne due to captive iron ore mines.
The company sells it at a profit margin of a massive 75 per cent, at Rs 21,000 a tonne. Agarwal said, “We have our own coal mines. That is why our cost of production is lower than other sponge iron makers.”

On the other hand, a number of small sponge iron producers in Chhattisgarh have shut shop due to inability to procure raw materials like steel scrap and iron ore at such a high price. Imported steel scrap is quoted today at Mumbai port at $450-480 a tonne, a significant rise from $360-400 a tonne about a month earlier.
Similarly, the benchmark iron ore (with 63.5 per cent of Fe content) perked to $190 a tonne from $155-160 a tonne a month before.

“Though the flood in Australia did not impact supply of iron ore or coking coal, it created a sentimental boost to the entire steel sector,” said Vimal Kumar Somani, director of Topworth Group, a Mumbai-based sponge iron manufacturer which runs its plant in Raipur.
Prices of finished steel have also surged in line with hot-rolled coil, up to $760 a tonne today from $580 a tonne a month before. Shredded scrap is currently quoted at $500 per tonne, a significant rise from $440-450 a tonne, while heavy melting scrap (HMS) is sold at $450-480 a tonne today, as compared to $360-400 a tonne a month earlier.

Internal demand for steel is also bullish, especially from the automobile, construction and consumer durables’ sector, said Somani. Mega projects like power and national highways require a lot of steel. Therefore, prices of steel and its raw materials are likely to remain firm for at least the next two months, he added.

Rampant steel price rises in EU market - MEPS

Tuesday, 25 Jan 2011

UK based MEPS said that although consumption has changed very little, domestic producers are attempting to lift second quarter offers because of raw material price developments and energy cost increases. Outlay on iron ore is forecast to rise and coking coal shipments from Australia are being affected by the floods.
An upsurge in steel purchasing activity is predicted over the next few months as distributors look to refill depleted inventories. Consumption should also improve this year. Consequently, MEPS forecasts steel values to advance considerably during the first half of 2011.
Prices for flat products picked up rapidly during the second half of December, driven by higher input costs and some restocking by distributors. Both rerollers and the integrated producers benefited from the increases. Third country values are also soaring, making material from those sources quite unattractive.
Long product values are currently rising very fast in the European market, following a concerted push by producers, due to the continuous surge in scrap prices. Most distributors only purchased relatively small quantities at the end of last year and now need to buy in order to increase their stock levels. End user activity has improved slightly but remains subdued.(Sourced from MEPS - European Steel Review)