Ferrous Scrap
CRU: Downside risks continue for global scrap prices
Written by Puneet Paliwal
October 18, 2024
Global scrap prices increased in Asia and the US in October, although CRU believes downside risks remain for prices in the short term, particularly outside the US market.
The recent price rise in Asia was driven by a positive outlook towards steel demand in China following the announcement of government stimulus. However, the effects of the government measures will not be immediate, and this lag is likely to put pressure on scrap demand and prices after the restocking and optimism fades. A similar trend is expected in Japanese scrap export prices.
In Europe, the market is slow to recover. Scrap supply remains sufficient to meet demand, which has not picked up from the summer lull. The downward pressure on scrap prices persists as steel mills continue to ask for reductions in price and postpone deliveries.
The exception to this gloomy short-term outlook is the US market, where the end of mill maintenance outages and seasonally slow inbound of scrap into yards are expected to push prices up again in November.
Pig iron prices are also expected to increase in the short term but will be capped by the current wide premium over scrap prices. Supply to the US will remain focused on Brazil, as Ukraine will continue to focus on raising finished steel production using domestic pig iron. Meanwhile, Russian material will likely go to Turkey and Asia as the export quota to the EU has been exhausted.
Editor’s note: This article was first published by CRU. To learn more about CRU’s services, click here.
Puneet Paliwal
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