A brighter fourth quarter for the ferrous scrap market has been forecast by the president of the European Ferrous Recovery & Recycling Federation (EFR).
But Tom Bird, who is also managing director of Van Dalen Recycling UK, warned that European supply and demand was being affected by the recent growth of Chinese rebar exports to Turkey.
Bird told delegates to the latest convention of the Bureau of International Recycling (BIR) in Barcelona that ferrous scrap market conditions “should prove to be better” in the final quarter of 2012 than the previous three quarters.
With the onset of winter, he added, “prices in the EU markets should remain relatively stable and not fall further”.
“An extremely difficult period” was how Bird described the months following the previous BIR convention in Rome at the end of May.
“Challenging conditions”, he said, included “a complete about-turn” regarding the dynamics of the highly-influential Turkish market, whereby “the rebar price is now determining the price of scrap rather than the price of scrap determining the price of rebar”.
Bird said that an excess of production by China had led the country, in recent weeks, to “flood” traditional Turkish markets with rebar at levels well below those at which Turkey would wish to supply, he added.
“As Turkey is being squeezed out of its traditional markets, this will undoubtedly affect traditional EU markets as Turkey looks to replace sales. This will then further affect the state of the EU market,” he said.
The EU steel market was suffering “a strong downturn”, with the World Steel Association forecasting that demand in the region will be 5.6% lower this year and will improve only 2.4% in 2013 to reach 148 million tonnes, Mr Bird pointed out. Steel demand was “particularly low” in southern Europe.
He quoted the price for heavy melting steel I/II 80/20 scrap falling from around $400 per tonne at the time of the BIR meeting in Rome to nearer $360, before recovering to above $380 earlier this week.
- A review of the entire BIR Autumn Convention in Barcelona will appear in next week’s issue of MRW.