While the European Steel makers, who produce steel by their integrated plants, are idling more blast furnaces, the EF producers are scheduling longer maintenance works during the summer time. All of them are taking steps to reduce the production in response to the weak steel demand. The steady worldwide economic output in the recent weeks and the still present Euro zone economic doubts have curbed the steel orders, with some prices being down towards cost level or even below.

Scrap metal
It seems that the steel prices could be near the floor and any possible demand increase, even small, could start a new growth, boosting also the raw materials prices. The question is: how long do we have to wait for seeing the new jump? End of summer? Q4? First half 2013? Anyway the waiting will not be long.

In Italy the scrap prices during June 2012 suffered the lower mills demand. They moved down on the average of EUR 15 to EUR 20 for the monthly import deals from the EU Countries and from EUR 20 up to EUR 30 on the last ones quoted on the weekly domestic market. Steel makers are buying metallic raw materials only to cover their short term order books. Mills inventories are at low medium level and the scrap collection is heavily reduced. The June arrivals by vessel were about 57,000 tonnes for scrap, about 70,000 tonnes for pig iron and none for HBI.

Following the June official average prices reported (EUR per tonne delivered):

New arising E8:
Italy 310
France 320
Germany 320

Shredded E40:
Italy 325
France 330
Germany 325

Demolition scrap E3:
Italy 295
France 300
Germany 300

The July 2012 contracts will be conditioned by the summer stoppages up to now scheduled from 3 up to 5 weeks, starting from July 21st 2012 to July 28th 2012 till the August 20th to August 27th 2012. It means that the time available for the delivering is reduced only to 4 or 5 weeks for both July and August 2012.

PIG Iron - HBI
The pig iron arrivals at Marghera port are lower than the standard volumes, being about 50,000 tonnes. The resellers and mills inventories remained well replenished due to the low consumption. The last pig iron offers are on the market at something below USD 390 per tonne CIF for August 2012 shipment. None HBI arrival has been reported. The last HBI offers are quoted below USD 360 per tonne CIF.

Steel
The demand remains weak on the domestic side and the export to the North Africa countries is conditioned also by the next Ramadan Holidays.

Source - Recycling Portal

(www.steelguru.com)