Disappointing December Predicted for Global Ferrous Scrap Market

Weaker Overseas Demand and Price Adjustments
The outlook for the global ferrous scrap market in December is less than optimistic, with key markets showing little appetite for price increases. Atilla Widnell, from Singapore-based Navigate Commodities, had previously forecasted that Turkish mills were unlikely to raise their bids in late November, and reports from Davis Index confirm this prediction. There is also minimal movement in bids from buyers in South Asia, including India, Bangladesh, and Pakistan. The overseas ferrous scrap market is facing an overall decline in demand, particularly from these traditional buyers.

Turkey and South Asian Markets Show Weak Demand
Turkey’s Struggling Demand: Widnell highlighted that interest from Turkish mills in bulk cargoes from Southern and Eastern Europe has dwindled significantly, with the market described as “dead” a week before the prediction. Turkish mills have been reluctant to raise bids, which has led to sellers in the United Kingdom reducing their export prices to maintain competitiveness. As a result, the expectation is that Turkish mills will continue to purchase scrap at lower prices, making it unlikely for the market to see any upward price adjustments.

South Asia’s Softening Bids: Markets in Bangladesh, India, and Pakistan are also exhibiting a similar trend. In Bangladesh, mills are bidding $2 to $3 per ton less for imported, containerized shredded scrap, with no major upward movement expected in the short term. In India, there are no signs of price increases either. Pakistan is also facing a near five-year low in imported shredded scrap prices, further indicating a weak market for imported scrap.

U.S. Scrap Exports Feel the Impact of Global Competition
While Widnell did not focus on U.S. scrap exports in his commentary, the situation for U.S. shippers looks bleak. As European sellers, particularly in the U.K., lower their prices to attract buyers, U.S. sellers are not likely to push for price hikes either. Late last week, Davis Index reported a U.S.-origin bulk Heavy Melting Steel (HMS) shipment to Turkey was sold for $3 less per ton than the previous price. U.S. exporters are finding themselves unable to secure higher prices, especially with the ongoing price reductions from key competitors in Europe.

Japan’s Strong Scrap Exports Add Pressure
The growing competition from Japan, which is emerging as a significant exporter of ferrous scrap, is making it even more challenging for U.S. shippers. According to Navigate Commodities, Japan has shipped over 2 million metric tons of ferrous scrap to Vietnam, along with substantial exports to South Korea and Taiwan in 2024. This large supply of Japanese scrap has added pressure on U.S. West Coast shippers, further limiting their ability to secure better offers in the global scrap market.

Domestic Mills and End-of-Year Tax Considerations
For U.S. steel recyclers, the prospect of domestic mills bidding higher for scrap in December is also dim. Mills in states where end-of-year inventory taxes are a factor tend to keep their scrap volumes minimal during this period, reducing the likelihood of aggressive bidding. December is historically a quiet month for scrap recyclers, and 2024 does not seem to offer much hope for a boost in bids, especially from U.S. mills.