Benelux scrap exporters bemoan weak inflow, buyer pressure

Benelux scrap exporters are seen struggling to source material amid weak material flow in the EU.

Exporters’ dock prices were mostly at €295-310/tonne ($292-307) delivered on Monday, unchanged from one week prior. Activity was, however, quite limited on Monday as some countries in the EU were on holiday.

Due to flow being extremely weak, some exporters have been forced to increase prices to secure material to cover previous sales.

One Benelux supplier tells Kallanish: “We are trying to source HMS 1&2 80:20 at €305/t, although this level does not allow a profit for us. Inflow is still very poor. Two of my German suppliers said this level is not acceptable and they have already closed the year.”

Another exporter adds: “As we are approaching the end of the year, our suppliers, who had really profitable first-half-year financials, do not want to bear a loss and … want to sell the material in their inventories at a good price.”

Benelux exporters seem to be squeezed between high-priced material and buyers’ pressure on prices.

Turkish demand for scrap continues to remain lacklustre as mills do not find current prices workable amid decreasing steel prices and non-existent steel demand. Although a US-origin deal was concluded at $363.5/t cfr Turkey for HMS 1&2 85:15 last week, most mills will not pay this level, instead preferring to either buy cheaper billet or halt production. On the other hand, expectations for further hikes in energy prices in November are preventing them from buying scrap.

A Turkish mill says: “In February 2020, when iron ore was at today’s levels, scrap was at $260/t cfr. Due to costly scrap and energy, Turkey has completely lost its competitiveness in the global arena as all prices except for scrap and energy are falling.”

Most Turkish mills think scrap should fall at least to the low $300s.

In India, offers for containerised shredded stand at around $435-438/t cfr Nhava Sheva, unchanged from last week. However, activity was almost zero last week due to the Diwali holiday. Indian buyers are expected to bid at lower levels this week. Sentiment has now turned bearish due to the arrival of previous bulk purchases, which have increased the availability of material in India.

Burcak Alpman Turkey