As iron ore prices plunge to record lows not seen since 2009, demand from international suppliers continues to wane. The decline in prices is being felt across the markets, adding further pressure on the international steel and UK scrap markets.
While there is some demand from buyers in India and Turkey, buyers are also reportedly seeking a $10 (£6) reduction against last month’s prices.
At home, local steelworks and direct suppliers had not agreed tonnages or prices for September deliveries at the time of going to press. But merchants were gloomily predicting cuts of £10 per tonne at worst or a price rollover at best.
As for tonnages, they are likely to be limited because of a lack of stock combined with continuing low yard intakes.
These low levels of arisings are expected to become the norm, as manufacturing, demolition and, in particular, construction industries continue to underperform.
The two biggest exporters are shipping a few cargoes, but some of the dockside stockpiles may have been diverted to home steelworks.
All sectors of the trade report very low levels of activity. With Sims, one of the world’s biggest recyclers, reporting huge losses in its annual accounts, the outlook remains gloomy.
A spokesman for one of the major processors says: ‘It is tough to buy anything. There is almost nothing out there, and if you don’t pay you won’t get it.’
Margins are very low and there are no signs of any improvement in the near future.