UK based MEPS said that Russian transaction values for 3A graded material declined in the central, southern and Ural federal districts in June 2012. Local traders expect domestic selling figures to continue to move downwards in the short term, at a slower rate though. Integrated pipe makers reduced their purchasing prices to minimize production costs.

Difficult trading conditions persist in Ukraine. Purchase prices, denominated in the national currency, declined by 7.3%. Like their Russian counterparts, domestic mills are under pressure to reduce their production overheads, amid weak sales of finished steel products. Traders doubt there will be a significant rebound in activity next month.

Purchasing prices for the three bellwether cut grades tracked in the United States fell sharply. The market's demand supply imbalance and weak offshore demand has fuelled expectations of further reductions next month. Confidence has been further eroded by the mills' decision to reduce their buying programs.

East Coast export yards adopted flexible pricing positions in week 24. The US dollar is extremely strong against a basket of currencies. Overseas buyers are expected to persevere with strategic purchases as a result. Turkish steelmakers acquired ferrous scrap sporadically in June 2012, after finding it difficult to fill order books.

MEPS' sources assert that the mills are in no immediate hurry to enter into negotiations with their foreign suppliers, amid the risk of further declines. Price support from other global markets remains limited.

Ferrous scrap prices in the European Union declined in June 2012 for the three grades surveyed. Continental traders are pessimistic about the future trend for domestic transaction value in the upcoming summer months. European exporters are divided over the outlook for offshore trade in the near term. They have struggled to exploit the weakness of the euro against the US dollar.

Source - MEPS - Ferrous Scrap Review

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