BIR World Mirror on Ferrous Metals: Disruption leading to greater regionalization of trade
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.
Challenging supply conditions for many recyclers are not fully reflected in prices for recycled steel, it is widely reported in the latest edition of BIR’s Ferrous Mirror publication.
Towards the end of the first quarter in Germany, recycled steel prices lost most of their earlier gains on waning interest from export markets as well as domestic finished steel price weakness owing to poor demand from downstream industries, import pressure and global overcapacity. This was despite ongoing supply difficulties for recyclers - notably for old grades of recycled steel.
According to feedback from Scandinavia, fierce battles for volume are resulting in lower margins, reduced earnings and a hard time for many operators at present. Recent recycled steel price levels for the important Turkish market are described as relatively reasonable from a historical perspective but not an expression of major buying interest. The same source also indicated some improvement in interest from Pakistan and India, stimulated by falling freight rates over recent months.
Increased demand from India was also reported from the UK. This comes at a time when exports from the UK have become even more important because of a domestic demand described as dismal. Tata Steel has now confirmed the closure of its two blast furnaces at Port Talbot in Wales - one by the end of June and the other by end-September. The company is proceeding with its US$ 1.5 billion investment in an electric arc furnace (EAF), which is scheduled to come online in late 2027.
Projected EAF investments - notably in the USA, Canada and Europe - should lead to an increase in recycled steel demand, it is noted. For the moment, however, trade tensions, global conflicts and political developments have combined to disrupt traditional routes to market, leading to an increased regionalization of trade.
Across in the USA, some mills have responded to weak new steel prices by applying downward pressure on recycled steel suppliers in a bid to recoup more margin. However, there appears to be little scope for reductions as collection volumes have already declined at current price levels.
Meanwhile, the depreciation of the yen in relation to the US dollar has increased the export competitiveness of Japan’s recycled steel but inquiries from importing countries are currently weak owing to falling prices for steel products from China. According to the Japanese Ministry of Finance and Trade Statistics, the amount of recycled steel exported from Japan in March this year was 515,971 tonnes, down 17.4% from the previous month and 10.4% from the same month last year.
In the fifteenth and latest “World Steel Recycling in Figures” publication from the BIR Ferrous Division covering the whole of 2023, Statistics Advisor Rolf Willeke confirms that recycled steel usage across key countries and regions was 12% lower last year at 411.281 million tonnes despite a 0.2% increase in their total crude steel production to 1.555 billion tonnes. These figures represent verified data for 82.2% of global steelmaking last year.
China remained the world’s largest user of recycled steel although its total edged 0.8% lower year on year to 213.68 million tonnes, equating to a 21% share of crude steel production.
Elsewhere, these shares were 59.2% for the EU-27, 69.8% for the USA, 36.6% for Japan, 39.2% for South Korea and an eye-catching 86.3% for Turkey.
Last year’s 10.1% drop in Turkey’s overseas recycled steel purchases to 18.775 million tonnes failed to dislodge the country from its long-established position as the world’s foremost recycled steel importer. India was the second-largest importer in 2023 (+40.4% to 11.760 million tonnes), followed by Vietnam (+19.6% to 5.143 million tonnes).
The leading recycled steel exporter in 2023 was, yet again, the EU-27 on the back of a 9.2% year-on-year increase to 19.219 million tonnes. The USA was in second place although its overseas shipments dipped 6.9% to 16.264 million tonnes.
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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.