UK based MEPS said that in China, average provincial quotations declined by 4.9%. Local steelworks allowed inventories to rundown, this inadvertently unsettled market confidence. The downward price trend is forecast to persist into July 2012. Sales volumes of finished steel products are expected to be weighed down by declining manufacturing growth rates. The China Iron & Steel Association has questioned whether the country's current crude steel production levels are sustainable in the long run.
Negative price movements were witnessed in three of the four Indian regions researched. Business confidence has deteriorated amid weak underlying demand growth for finished steel products, economic uncertainties and a sharp downward adjustment in other input costs particularly, pencil ingots, DRI and pig iron. Containerised scrap import quotations have declined by 8.9%.
The outlook for the Japanese market remains uncertain. Tokyo Steel Manufacturing, a bellwether for the domestic steel industry, lowered its HMS 2 buying prices at all subsidiaries in weeks 23 and 24. Other steelmakers have followed the move by Tokyo Steel. Prices last fell to current levels in mid December 2009. The export tender held by Kanto Tetsugen failed to nullify the negative price sentiment.
Taiwanese mills, operating electric furnaces, are reluctant to procure material, in view of the persistently weak market for finished steel products and the onset of the country's monsoon season. The price differential between domestic and imported scrap is now negligible. Local traders remain divided over the future trend of foreign material offers.
The business environment remains challenging in South Korea. Local traders found it difficult to liquidate inventory to free working capital. Domestic and import quotation fell sharply amid thin trading.
MEPS' sources expect buying activity to improve in late August at the earliest. The Korea Iron & Steel Association forecasts that domestic scrap processors will supply 90 percent of the country's ferrous scrap requirement by 2020.
Source - MEPS - Ferrous Scrap Review
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