SteelMint Events

Tag: Ferrous Scrap

  • SteelMint analysis: An overview of Turkiye’s steel sector

    SteelMint analysis: An overview of Turkiye’s steel sector

    Turkiye is one of the largest ferrous scrap importing countries in the world. Other key industries that contribute to the country’s economy include textiles, chemicals, cement, motor vehicles and construction. The country provides certain leverages for international trading and is a key destination for trade between Europe and Asia.

    Turkiye produced 40.4 million tonnes (mnt) of crude steel in CY 2021 out of which 11.47 mnt i.e. 28.4% was churned out from oxygen furnace (BOF) and 28.93 mnt i.e. 71.6% was produced from electric arc furnace (EAF), as per World Steel Association (WSA) report. Higher crude steel output resulted in increased scrap consumption.

    • Pig iron imports up: Turkiye’s pig iron imports stood at 1.2 mnt in 2021 vis-à-vis 1.14 mnt in the corresponding period last year (CPLY), up slightly by 5.3% y-o-y. The country’s entire consumption in 2021 was 11.6 mnt.
    • Steel exports see 15% rise: Total finished steel exports from Turkiye jumped 15% to 19.2 mnt in 2021 compared to 16.75 mnt in 2020.

    Also, according to the Turkish Automotive Manufacturers’ Association (OSD), total car production in CY21 stood at 1,276,140 units wherein exports amounted to 937,005 units, marking an increase of 2% as compared to 916,538 units in CY20.

    Turkiye’s scrap market in 2021

    • Ferrous scrap import shipments increase: Turkiye recorded ferrous scrap imports at 24.37 mnt in 2021, an increase of 10% against 22.18 mnt in 2020, as per SteelMint data. USA accounted for the largest share of 16% in total exports to Turkiye in CY21 followed by the Netherlands at 13% share and the UK at 10%.
      If compared on m-o-m basis, the country’s imports rose by 22% to 2.49 mnt in December 2021 vis-a-vis 2.04 mnt in November. Notably, import volumes in December were the highest in 2021.

    Reasons behind the rise in imports–

    • Imported ferrous scrap demand in the Turkish market rebounded in CY21 as mills remained active in booking deep-sea scrap cargoes throughout the year as buying interest picked up slightly.
    • There was an improvement in demand of billets and long steel products in the Turkish market. Market participants believe that strong demand for billets kept scrap bookings active.
    • Freight rates from the US coast to Turkey fell which eased scrap prices, boosting buying interest.

    Imported scrap prices rise in CY21

    SteelMint’s assessment of US-origin HMS 1&2 (80:20) stood at $459/t CFR Turkey in January-December 2021 against $291/t CFR in January-December 2020, up by around $168/t CFR Turkey y-o-y.

    Prices surged as Lira eroded against the dollar to settle at TRY 13.31 in 2021 which was at 7.37 towards the end of 2020. The volatile market situation and a sharp fluctuation in the national currency put pressure on steel mills to lower their local scrap prices in 2021. Also, sluggish domestic and overseas demand, especially from China amid the winter months kept Turkish market under pressure.

    Hassles in scrap market:

    • Suspension of operations at mills on higher electricity costs: EAF steelmakers announced suspension of crude steel production in the first few months amid increased electricity costs. As a consequence, buying activities in the regional market decreased. The heavy snowfall also caused logistical problems in the market.
    • Russia hikes scrap export duty: Russia approved an almost three-fold hike in the export duty on ferrous scrap, effective 1 May’22, to support domestic raw material availability and control the rise in steel prices. The minimum duty on exports of ferrous metals outside the Eurasian Economic Union was increased from EUR 100/t to EUR 290/t.
    • Government declares surge in energy tariffs: The start of summer season was accompanied by a sharp rise in energy tariffs. Economic factors and the global hike in energy costs are among the reasons behind it. The Turkish Energy Market Regulatory Authority increased prices depending on the customer category.
    • Rising billet imports: Also, the country’s billet imports in H1CY22 increased sharply as its prices were almost at par with those of imported scrap. Russia was the top exporter with 75% share followed by Ukraine with 5%.

    Way forward:

    The input costs of Turkish steel mills are anticipated to increase further after the country’s Energy Market Regulatory Authority elevated electricity prices for industrial use by 50% on 31 August 2022. State gas distributor Botas also raised natural gas prices for industrial use by 50.8% from September 2022. This may lead in Turkish steel mills opting for production cuts or lift prices despite the sluggish market as their margins are lower.

    SteelMint Events will be hosting the 3rd Steel & Raw Material Conference, Emerging Bangladesh, on 20-21 September, 2022 at Hotel Radisson Blu, Chittagong, Bangladesh. The conference will explore key issues like the country’s steel production and demand outlook, global scrap trade flow changes, especially post-the Russia-Ukraine war, the ship recycling scenario, key emerging sectors, price trends and a lot more.

  • SteelMint analysis: Bangladesh likely to improve scrap imports to raise steel melting capacity by 2025

    SteelMint analysis: Bangladesh likely to improve scrap imports to raise steel melting capacity by 2025

    • Bangladesh set to increase steel melting capacity around 13 mnt by 2025
    • BSRM, AKS, GPH and many other mills are setting up additional capacity
    • Bashundhara, Meghan & Akij entering steel business

    Bangladesh, one of the largest ferrous scrap importers in South Asia, is likely to witness an increase in steel melting capacities from 9 million tonnes (mnt) per annum currently to around 13 mnt by 2025 due to the growing demand for steel, cement, power and upcoming infra projects.

    Renowned steel producers in Bangladesh like BSRM, AKS, GPH, and many other mills are setting up additional capacity and facilities to cater to government-funded infrastructure projects in the coming years.

    Bashundhara Group is expanding its capacity to 1.2 mnt (EAF) in the 1st phase and 2.2 mnt (DRI) in the 2nd phase; Meghna by 1 mnt (EAF); AKS and Unitex by 800,000 t; BSRM by 500,000 t; and Akij by 300,000 t.

    Why is Bangladesh an emerging economy?

    • GDP growth rate: The economy of Bangladesh has a projected GDP growth rate of 6.4% for FY’23 as an emerging and fastest growing economy after India in South Asia.
    • Increasing steel demand for govt-funded projects: Steel demand in Bangladesh may remained supported mainly due to the government-funded infrastructure projects which were launched to stimulate the economy hit by COVID-19. Projects such as the Ashrayan Project, Metro Rail, Karnafuli Tunnel and elevated expressway from Dhaka Airport to Kutubkhali are expected to boost infrastructure construction. Hence, scrap demand is also likely to remain supported this year as well as in 2023.
    • Development of port facilities: Due to inadequate port facilities in the country, large ships were unable to enter Chittagong port. However, the Bangladeshi government has started working on projects such as the Matarbari Deep Seaport, which is estimated to be completed by 2026. Once these projected ports are completed, steel manufacturers will be able to import scrap more easily, which will ultimately speed up their production.

    Expert opinion

    “Over the past five years, Bangladesh has become an integral part of the ferrous scrap trade in the South Asian region. As new steel capacities come onstream, scrap suppliers are looking forward to continuing the close relationship with the country in the years ahead,” stated Zain Nathani, Director, Nathani Group of Companies, India.

    Sanjoy Ghosh, Head of Supply Chain, BSRM, said: “Steel industries in Bangladesh are entering into a new phase amid higher demand forecast in line with projected economic growth. Despite the current global economic turmoil, all major plants are into enhancing their capacity and also new plants are trying to create a footprint in the market in order to cater to future demand. So, it is challenging time ahead for entire steel industry.”

    Scrap import scenario

    Bangladesh is a country which is entirely dependent on scrap for steelmaking. The volume of imported ferrous scrap (both bulk and container) into Bangladesh stood at 2.83 million tonnes (mnt), up 53% in the first half (H1) of 2022 as against 1.85 mnt seen in the same period in 2021.

     

    Bangladesh: Total ferrous scarp imports

    As Bangladesh is eying over 6% GDP growth in the current year, the South Asian nation is making a concerted effort to spearhead infrastructure spending, which is expected to increase steel consumption going forward. However, it will be interesting to see if demand remains supportive against the backdrop of rising steel capacity.

    Join our event to know more on whether Bangladesh’ scrap imports will touch 6 mnt by 2025.

    SteelMint Events will be hosting the 3rd Steel & Raw Material Conference, Emerging Bangladesh on 20-21 September, 2022 at Hotel Radisson Blu, Chittagong, Bangladesh. The conference will explore key issues like the country’s steel production and demand outlook, global scrap trade flow changes, especially post-the Russia-Ukraine war, the ship recycling scenario, key emerging sectors, price trends and a lot more.

  • Bangladesh: Bulk ferrous scrap imports up 72% in H1 CY’22, US exports surge

    Bangladesh: Bulk ferrous scrap imports up 72% in H1 CY’22, US exports surge

    Imported scrap volumes into Bangladesh, a major bulk ferrous scrap buyer, imports bulk ferrous scrap 1.76 mnt in H1 CY2022 (January-June, 2022) vis-a-vis 1.09 mnt in H1 CY2021.

    The country’s imports rebounded in June 2022 by 57% to 0.33 million tonnes (mnt) from 0.21 mnt in May 2022, as per SteelMint’s vessel line-up data.

    Stocking by Bangladesh’s leading steel mills gained momentum in June through bookings of bulk cargoes ahead of the holy festival of Eid. They could restock material at lower price levels due to lower freights. The country imported a total of 4.42 lacs tonnes of ferrous scrap in June 2022, which comprised 70% in bulk and 30% in containers, as per SteelMint sources.

    Country-wise data:

    • Imports from US skyrocketed: Imports from the US, the largest supplier of bulk scrap to Bangladesh, witnessed a sharp rise m-o-m as freight rates of bulk material were low in comparison to that for containers. Shipments of 0.16 mnt were recorded in June, up a whopping by 129% from 0.07 mnt in May.
    • Imports from Japan resume: Interestingly, Bangladesh’s scrap imports from Japan resumed in June. The country imported 0.05 mnt in June, compared to nil in the previous month.

    Price trend: SteelMint’s monthly average price assessment for US-origin bulk HMS (80:20) scrap stood at $543/t CFR Chittagong in May as against $655/t CFR in April.

    Setting up of new furnaces: A few steel mills in Bangladesh are planning capacity expansion or to set up new furnaces. However, these projects are still underway and may be completed by CY2023. Once completed, this will increase the steel mills’ scrap consumption in the years to come.

    Outlook

    Bulk imported scrap buyers are observing the market closely before resuming the next round of bookings. Not many offers for bulk US scrap for July shipments were heard.

    Join our event to know more on whether Bangladesh’ scrap imports will touch 6 mnt by 2025.

    SteelMint Events will be hosting the 3rd Steel & Raw Material Conference, Emerging Bangladesh on 20-21 September, 2022 at Hotel Radisson Blu, Chittagong, Bangladesh. The conference will explore key issues like the country’s steel production and demand outlook, global scrap trade flow changes, especially post-the Russia-Ukraine war, the ship recycling scenario, key emerging sectors, price trends and a lot more.

  • Will United States Ferrous Scrap Exports Slow Down in 2019?

    Will United States Ferrous Scrap Exports Slow Down in 2019?

    United States – world’s second largest ferrous scrap exporter after EU-28 has marked successive growth in annual ferrous scrap exports volumes since last three years. But will the same momentum continue taking its EAF ramp up plans into consideration?

    US exported 16.59 MnT ferrous scrap in CY18. Trade participants have already pointed out that CY19 could be the year of significant importance for the global economy considering impact of Trade war and sanctions.

    US scrap consumption to increase in coming years?

    1. Ramping up of EAF capacities and investments in the US – In Jan’19, Nucor Corp. announced a new EAF mill of USD 1.4 billion in the Midwest to produce 1.2 million tons steel per annum. Steel Dynamics, a producer based in Fort Wayne, Ind., plans to build a USD 1.8 billion mill with an EAF in the southwestern U.S. with an annual capacity of 3 million tons. GFG Alliance, a British conglomerate, announced plans in January to expand its U.S. steel production by 800,000 tons a year and restart a second electric arc furnace at a South Carolina plant. In Feb’19, U.S. Steel Company said it would begin construction on an EAF at its Fairfield plant near Birmingham, Ala.

    2. Rise in DRI production – As per Midrex reports, total DRI production in North America (USA & Canada) recorded at 4.60 MnT in CY17 up 44% Y-o-Y against 3.20 MnT in CY16. While that in Latin America recorded at 10.51 MnT in CY17, up 14% Y-o-Y against 9.19 MnT in CY16. These numbers are expected to have increased in CY18 with US turned as a supply merchant with the first HBI plant in the United States, located outside Texas ramped up production in 2017. Also, Cleveland-Cliffs, Inc. had announced in June of 2017, plans to build a 1.6 MnT pa HBI Plant in Toledo, Ohio, USA.

    3. Increasing ferrous scrap imports – US ferrous scrap imports recorded at 4.72 MnT in CY18, up 8% Y-o-Y against 4.36 MnT in CY17. The US exports a lot of low-quality scrap, but imports high-quality raw material. That means there is a shortage of prime grade scrap there.

    4. Rising crude steel production on increasing EAF output – According to world steel association, US crude steel production recorded at 86.60 MnT in CY18, up 6% Y-o-Y as against 81.61 MnT in CY17. US total crude steel production was recorded at 78.47 MnT in CY16 comprising of 67% share of EAF route while 33% share of blast furnace production. Reports suggest that country’s EAF steel output has been constantly increasing since past couple of years resulting in rising domestic scrap demand apart from rising scrap imports which may lead to limit exports in CY19.

    The imposition of tariffs has provided the much-needed protection to American steel producers who have long struggled to cope with a tide of cheap foreign imports. The punitive tariffs appear to be bearing fruit as reflected by a decline in U.S. steel imports in CY18.

    Scrap oversupply situation in Turkey, Brexit dynamics in Europe, Iran driven suffocation, changing dynamics of recycling in India, will keep global scrap demand volatile in CY19. Thus, it seems scrap consumption in US will increase in near term and emerging scrap markets like Vietnam, South Korea, Bangladesh, Pakistan and Indonesia could have to pay high for US scrap in CY19.

    The imposition of tariffs has provided the much-needed protection to American steel producers who have long struggled to cope with a tide of cheap foreign imports. The punitive tariffs appear to be bearing fruit as reflected by a decline in U.S. steel imports in CY18.

    Scrap oversupply situation in Turkey, Brexit dynamics in Europe, Iran driven suffocation, changing dynamics of recycling in India, will keep global scrap demand volatile in CY19. Thus, it seems scrap consumption in US will increase in near term and emerging scrap markets like Vietnam, South Korea, Bangladesh, Pakistan and Indonesia could have to pay high for US scrap in CY19.

    4th Steel Scrap, Billet & DRI Trade Summit

    Don’t miss the opportunity of meeting global buyers and sellers at the 4th Steel Scrap, Billet & DRI Trade Summit in Bangkok, Thailand, to be held from 27-29th August 2019.

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