Prices are not going up: scrap is suffering from weak demand and currency fluctuations
The recycled steel (scrap) market continues to feel the burden of macroeconomic instability this year. This is discussed in the World Mirror report, a division of the World Association of Processors (BIR).
As noted, the constant uncertainty continues to worsen market sentiment and has led to unfavorable conditions in the sector.
In Europe, the report says, limited scrap shipments are widely reported. At the same time, reviews from the UK, for example, indicate that many shredders operate at only about 60% capacity. Despite the limited flows of this material, the potential for price increases remains limited. In addition, a significant drop in the US dollar against the euro led to lower selling prices in the Turkish market. Rental prices remain under pressure in many parts of Europe, which limits the potential for a broader recovery in the scrap market.
In the USA, in April and May, there was a consistent decrease in scrap prices (by $40/ton). However, thanks to quick negotiations between dealers and factories, raw material price quotations remained unchanged in June and also in July amid a reduction in metallurgical production due to some planned and unplanned downtime. Although steel production in the United States is healthy due to import tariffs, the missing element is still consumer demand.
The Asian marine scrap market is under pressure due to the strong dynamics of Chinese steel exports. For example, South Korean steelmakers are suspending operations amid oversupply at aggressive prices. Taiwanese manufacturers also continue to reduce their steel production. Limited demand led to a drop in scrap prices and reduced customer interest. The plants are taking a cautious position against the background of foreign currency volatility and competitive offers from the sale of blanks.
In the countries of the Cooperation Council for the Arab States of the Persian Gulf, demand for steel remains high amid active construction activity. Domestic scrap shipments in the Persian Gulf region are growing, but remain limited. This is prompting initiatives such as UAE investments in the environmental dismantling of ships.