Ferrous Metals – Quarterly Report July 2024.

Low recycled steel supply creating intense competition for material

A concise summary of the BIR World Mirror on Ferrous Metals – Quarterly Report May 2024. Full version with detailed market reports available in the Members Only section of the BIR website.

Once again, limited availability of recycled steel is a recurring theme among expert contributors to the BIR Ferrous Division’s latest Mirror publication.

From Scandinavia, it is suggested that low supply is making it difficult for industry players to obtain sufficient volume to fill their capacities. At the same time, limited supply has intensified competition and duly reduced margins such that revenues and earnings are under pressure for many dealers.

Feedback from the UK market, meanwhile, indicates that steel mill prices for recycled steel have remained relatively flat because it is suspected that any attempts to implement decreases would simply dampen supply even further. Here too, competition for material among yard operators has been intense, with the inevitable effect of squeezing margins across the board.

Competition for volumes is particularly acute among UK shredder operations and is only likely to intensify with new capacity coming online in South Wales and Birmingham. For Scandinavia’s shredded material, meanwhile, prices have made slight gains in the Indian market but sales prospects have been undermined by high container freight rates.

In Germany, meanwhile, demand for recycled steel jumped by almost 400,000 tonnes year on year in the opening five months of 2024 as a result of increased crude steel production. However, steel production lost impetus during May.

There is a slight recycled steel deficit in the US market where record temperatures have trimmed collections by 20% to 30% in some regions. The anticipation is that volumes will be inadequate to meet demand once consumers return from summer breaks and steel demand would be expected to increase.

The USA has recorded an increase in export tonnages as coastal prices have been forced upwards on international demand for recycled steel. Turkey has purchased additional volumes at slowly increasing prices amid tightening European availability. The Asian market has also been supportive of recycled steel prices owing to limited availability.

According to statistics from Japan’s Ministry of Finance and Trade, recycled steel exports amounted to 520,493 tonnes in May for an increase of 10.3% over the previous month but a decline of 12% from the same month last year.

Meanwhile, the construction sector in the United Arab Emirates is expected to grow and to drive requirements for steel, with a suggestion that the country may become a net importer of recycled steel to meet this demand.

In the latest update of the “World Steel Recycling in Figures” publication from the BIR Ferrous Division, it is revealed that China retained its position as the biggest user globally with a 1.9% year-on-year increase to 58.55 million tonnes in the opening quarter of 2024. This was achieved despite a 1.9% decline in the country’s crude steel production to 256.6 million tonnes.

Turkey turned in a significantly stronger performance when compared to the first quarter of 2023: the country’s recycled steel consumption jumped 20.8% to 8.077 million tonnes while its crude steel production climbed even more steeply, by 28.4% to 9.532 million tonnes.

The first quarter of 2024 also brought a 7.8% year-on-year increase in Turkey’s overseas purchases of recycled steel to 5.327 million tonnes, thus maintaining the country’s position as the world’s foremost recycled steel importer. India was the world’s second-largest importer in the first three months of 2024 despite a 29.2% year-on-year reverse to 2.28 million tonnes.

The EU-27 maintained its position as the world’s top recycled steel exporter in the opening three months of 2024 despite a year-on-year decline of 11.2% to 4.336 million tonnes. Exports from second-placed USA fell even more steeply, by 17.2% to 3.340 million tonnes.

In releasing its latest Mirror publication, it is confirmed that the BIR Ferrous Division board intends to focus on the pathway to “green steel” and the related importance of recycled metal at its next plenary session taking place in Singapore this October. The recycling industry stands at the forefront of any genuine claim of “green steel” production, it is contended.

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With contributions from its members, BIR publishes periodical commodity reports under the label “BIR World Mirror”. These detailed reports exist for Non-Ferrous Metals, Ferrous, Stainless Steel / Alloys, Paper, Plastics and Latin America and provide BIR members with up-to-date information on the respective commodity or market segment.

The report on Non-Ferrous Metals appears once every two months, whereas Ferrous, Stainless Steel, Paper and Plastics are published quarterly. Latin America is covered twice per year.