UK STEEL SCRAP WEEKLY: Price range widens upward on tight availability
The price range for light iron scrap in the UK widened upward during the week to Friday September 17, with major processors seeking to attract enough feedstock into their yards to keep their scrap-processing machines working cost-effectively, trade sources have said.
Fastmarkets’ weekly price assessment for steel scrap 5C, loose old light, domestic, delivered inter-merchant, UK, was £170-190 ($235-262) per tonne on Friday, from £170-185 per tonne the previous week.
Steady demand for European shredded scrap from traditional deep-sea destination markets, such as the Indian subcontinent, has also shored up prices in the British market, sources said.
“We have, in fact, had to increase light iron scrap prices in a few cases to ensure we do not lose flows into our yards,” one major scrap processor said. “Fragmented [shredded] scrap has migrated to other markets, some of which were offering substantially more than [British] domestic offers in early September, such as India and Pakistan.”
Adding to strong export market prices was the acute shortage of freight containers, which, along with high freight rates, has propelled costs to record highs. Overall availability of light iron scrap is tight in the UK market and the situation was expected to persist at least in the short term if current conditions also continued, trade sources said.
The UK export scrap market typically influences domestic British prices. Exports account for more than 80% of annual steel scrap sales in the UK, which typically generates around 10 million tonnes per year. UK scrap trade sources said that container market prices were firm at present, but container availability and commitments on tonnage were keeping a limit on volumes.
Earlier this week, UK monthly delivery settlements to domestic steel mills were agreed at a reduction of around £15 per tonne. A couple of the major domestic steel mills wanted a reduction of more than £20 per tonne for September deliveries, and their intake of steel scrap in recent months has been less than half of what they usually buy, according to some scrap suppliers.
European prices for exports into traditional deep-sea destinations such as Turkey and India have been fairly steady over the past week.
Fastmarkets’ daily index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey, was calculated at $434.58 per tonne on Friday, down from $440.24 per tonne a week earlier.
The calculation of the corresponding steel scrap shredded, index, import, cfr Nhava Sheva, India, was $521.58 per tonne on Friday, up from $518.84 per tonne the previous week.
And the steel scrap, shredded, index, import, cfr Port Qasim, Pakistan, was $526.91 per tonne on Friday, down from $530.42 per tonne one week before.