Analysts have named the reasons for the rise in scrap prices in September

Last week (August 27 – September 3), scrap prices remained unchanged at $440-450/mt CIF. The price confrontation is gaining momentum amid weak demand for raw materials on the one hand and a limited supply of raw materials on the other. In addition, attempts by traders to reduce prices were not crowned with success due to the high purchase cost of scrap in the internal markets of the EU and the United States. As a result, the operating price range for HMS 1&2 (80:20) scrap was $440-450/mt CIF western Turkish ports, while in Asia the deals were in the range of $430-440/mt CIF South Korean ports.

In the first half of September, export quotations for scrap metal will fluctuate in a wide price range. Traders will try to put pressure on suppliers, but the latter are unlikely to go for significant price reductions due to the low productivity of scrap collecting industries in the US and EU. However, by the end of the month, the cost of scrap metal will go up against the background of the need to replenish stocks by the largest importers.

Also, the decline in quotations in July-August will lead to an aggravation of the shortage of raw materials. As a result, the market will be imbalanced, and the lack of supply will push exporters to actively raise prices.

The rise in scrap quotations will also be facilitated by the revival of demand for long steel products in Turkey and the Middle East. Among the factors limiting the rise in prices, one can note the expected decline in the cost of iron ore raw materials. The forecast range of prices for scrap in September is $440-460/mt CIF.

Source: "Ukrpromvneshexpertiza"