UK ferrous scrap sales to south Asia surge

  • Market: Metals
  • 06/12/18

UK ferrous scrap exports to south Asia increased sharply in the second and third quarters of this year, offsetting a decline in sales to Turkey as suppliers moved to diversify their overseas markets.

Ferrous scrap exports from the UK to Turkey in April-September totalled 1.28mn t, down by a quarter from the same period in 2017, according to UK trade data (see table). Exports to south Asia rose by a quarter over the same timeframe to 1.18mn t.

Turkey received 28.45pc of all UK exports over the second and third quarters, down from 38.67pc in 2017. Shipments to south Asia accounted for around 26pc of UK exports in April-September, up from 20pc a year earlier.

UK suppliers shipped a combined 195,000t of ferrous scrap to India, Pakistan and Bangladesh in September, a 118pc increase from September 2017.

Turkey remained the UK's largest export market for ferrous scrap, but total shipments in September fell by 30pc from a year earlier to 219,000t.

The monthly movement reflects a wider rebalancing of UK export activity since April, in which the largest shift has been a reduction in bulk sales to Turkey and a rise in containerised shipments to south Asia.

Pakistan and Bangladesh were strong growth markets for UK scrap exports throughout 2017 and early 2018, but sales to India fell during that period. That weakness has now reversed, with UK ferrous scrap exports to India spiking by 277pc in September from a year earlier to 83,000t, making it the second-largest UK overseas market during that month.

India's attractiveness to UK exporters waned after late 2016 following several financial reform measures that made it harder for foreign firms to sell to the country. This caused UK containerised ferrous scrap supply to be redirected towards the strengthening neighbouring markets of Bangladesh and Pakistan.

But the recent resurgence in sales to India has not come at the expense of growth in other south Asian markets. Exports to Bangladesh increased by 92pc on the year to 47,000t in September, while exports to Pakistan rose by 52pc to 66,000t.

Lira crisis intensifies need to reduce Turkey exposure

Multiple factors have driven the Turkey-south Asia shift. The first is the onset of the lira crisis in Turkey, which both weakened the Turkish domestic market's steel demand and increased difficulty for exporters and steelmakers to obtain letters of credit for scrap deals.

By the first quarter of 2018, UK scrap exporters would have arguably been over-exposed to the Turkish import market even if Turkey's economic and political outlook was entirely stable. Turkey accounted for 42pc of all UK ferrous scrap exports in January-March, up from 35pc for the whole of 2017.

And as the weakening of the Turkish lira against the dollar deteriorated from a qualified concern in April to a full-blown currency crisis by August, UK exporters' urgency to reduce exposure to such a volatile market deepened.

Strong south Asia prices drive exporter appetite

Another driver of the shift away from Turkey is the comparatively more attractive prices at which UK suppliers have been able to sell to the south Asian markets in recent months.

The average price of the Argus weekly assessment for shredded scrap cfr Nava Sheva in India was $358.75/t in September. Market participants estimated the average freight rate for containerised scrap travelling from the UK to India at approximately $40/t, netting back to a fob price of $318.75/t for a UK supplier.

The average of the Argus daily cfr Turkey assessment for shredded scrap in September was $325.53/t. Argus estimated the average UK-Turkey Supramax freight rate for the month at $20/t, which nets back to a fob price of $305.53/t — $13.22/t lower than the equivalent fob price for a cargo sale to India.

Average fob-equivalent shred prices to Bangladesh and Pakistan carried similar premiums to what was achievable through bulk sales to Turkey during September.

Attractive pricing encouraged UK scrap collectors and smaller exporters to direct increased supply to the south Asian container market from April-September, rather than sell to large exporters' docks to fill bulk cargoes.

Simultaneously, large exporters moved to increase their own containerised sales, while also boosting efforts to sell bulk cargoes to south Asia and other alternative overseas markets in a bid to diversify sales away from Turkey.

South Asian scrap prices look unlikely to become less attractive compared with Turkey in the near term. Containerised shred prices fell throughout November on weaker demand, but remained stronger relative to the Turkish bulk market. The Argus weekly cfr Pakistan containerised shred assessment fell by $15/t from 2 November to $342.50/t on 30 November, while the daily cfr Turkey shred assessment dropped by $25.70/t to $317.50/t over the same period.

Major growth in Egypt and southeast Asia

Egypt and southeast Asia were the other main alternative growth markets for UK exporters during the second and third quarters this year. Egypt received 511,000t of UK scrap from April-September, a 35pc increase on the year. The country is the most natural geographic alternative to Turkey for large exporters' bulk shipments, and UK suppliers have built a strong position in the market.

Indonesia emerged as the fastest-growing market for UK scrap exports, with shipments across the second and third quarters totalling 171,000t, up from just 9,000t during the same period in 2017. UK exports to Vietnam rose from virtually nothing to 60,000t in April-June, while exports to Malaysia rose from almost zero to 22,000t.

As with south Asia, these southeast Asian markets have been initially targeted primarily for container sales from the UK, but as the trade route strengthens large exporters will increasingly seek opportunities to sell bulk shipments.

UK ferrous scrap exports 2Q-3Qt
Country20172018
Top 20ExportsShare %ExportsShare %±% 18/17
World4,416,2171004,515,80112
Turkey1,707,576391,284,73128-25
Pakistan495,92611570,0001315
Egypt378,6909511,1621135
Spain525,32012375,6338-28
India308,7457312,62271
Indonesia9,3060171,45341,742
Bangladesh87,4062297,2147240
Portugal188,8954171,5484-9
US207,7435169,6044-18
Vietnam1,637060,16613,575
Belgium49,231173,858250
Morocco42,528169,171263
Mexico0032,84910
Greece0072,42620
Kuwait92,651219,8000-79
Netherlands29,779146,570156

Sharelinkedin-sharetwitter-sharefacebook-shareemail-share

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News
28/03/24

Europe plate: Imports weigh on EU prices

Europe plate: Imports weigh on EU prices

London, 28 March (Argus) — Plate prices in Europe tumbled this week on increased import activity, which has pushed European producers to adjust their offers down to remain competitive. The Argus fortnightly Italian plate assessment dropped by €22.50/t to €730/t ex-works today for S235 grades, while the northwest European plate assessment for the same specifications also dropped by €15/t to €765/t. In the south, for S275 material, re-rollers were heard quoting €740-750/t to small customers, with €720-730/t possible for larger volumes. The market remained split between suppliers willing to drop to the low €700s/t to collect orders, and others that preferred to remain firm at €740-750/t and wait for after the Easter holidays to see how the market develops. Two re-rollers confirmed this week that they are mulling extending their Easter break by a few days owing to weak purchasing activity in the market. The level of €710/t ex-works for S275 was also reported available for orders of 1,000t and above, but this could not be verified. Buying activity over the past two weeks remained poor, as market participants are purchasing what they need with no restocking activity occurring. A slight drop in slab prices has contributed to lower plate prices. Deliveries for the Italian domestic market remain for late April for commodity grades. To the rest of Europe, Italian producers were heard offering around €750/t on a ex-works basis for S235 material, without collecting any tonnage. One source said there were offers as high as €760-770/t ex-works Italy. In northern Europe, one mill was reported concluding sales to end-users working in the shipbuilding industry at €750-770 ex-works for S355 grades. The same producer tabled offers at around €780/t, but was quick to offer discounts. Orders from the supplier are expected to be delivered in six to seven weeks. One source estimated that for S235, integrated mills would be offering close to €780-800/t ex-works, while from re-rollers located in the Benelux area €750/t ex-works for the same grade could be easily achieved. One central European mill was also heard available to sell at €790-810/t ex-works for S235. Producers in the northwest are operating on April to May delivery depending on the mill and the product requested. Market participants agree that a rebound in market activity is only expected towards the latter part of April. On imports, over the past couple of weeks, Indonesian material was purchased by buyers across the continent, especially in southern Europe at €640/t cif levels for S275. One source estimated that sales from Indonesia totalled close to 60,000t over the past month. After this activity, Indonesian material was not reported available over the past seven days. One deal was also concluded this week at €710/t cfr north EU, for South Korean S355 material. From South Korea, offers for S275 were estimated over the €660/t cif Italy level this week, with no deals concluded. Indian material was offered at $710-720/t cfr Italy for S275, while one trader offered the same origin from port, free on truck at €730/t for S355. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Read more
News

Turkey rebar: Market muted ahead of elections


28/03/24
News
28/03/24

Turkey rebar: Market muted ahead of elections

London, 28 March (Argus) — Turkish rebar prices were stable today, without a great deal of urgency shown by export buyers following a sustained uptick in scrap prices over the past few days. The domestic market remained subdued, as construction demand is still constrained by high borrowing costs and the ongoing depreciation of the domestic currency. Argus ' daily Turkish export assessment for rebar was unchanged at $590/t fob, with larger cargoes still available at this level. European, mostly Balkan, buyers have been making enquiries this week, with scrap prices inching steadily upwards over the past three weeks. But buyers have mostly been checking prices, and trade has remained thin. Rebar indications from suppliers were in a $590-605/t fob range, with most suppliers expecting at least $595/t fob. In the wire rod segment, material was available in a range of $605-625/t fob. The weekly wire rod assessment increased by $5/t to $600/t fob Turkey. In the domestic market, offers from most mills in the Marmara and Iskenderun regions were firm in a range of $610-620/t ex-works excluding value-added tax (VAT). But material remains available from Izmir mills and one Marmara mill at $595-600/t ex-works. While some buyers have made purchases in the run-up to the municipal elections on 30 March, restocking has been lacklustre, with a lack of firm signals from the construction sector. Argus ' daily Turkish domestic rebar assessment was unchanged at $600/t ex-works excluding VAT, with the lira equivalent also unchanged at TL23,4000/t ex-works including VAT. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Taiwan scrap imports fall 13pc on year in February


28/03/24
News
28/03/24

Taiwan scrap imports fall 13pc on year in February

Singapore, 28 March (Argus) — Taiwan's ferrous scrap imports fell on the year in February, reflecting rising prices, subdued activity during the holiday period and high stocks. Ferrous scrap imports totalled 218,887t, down by 21.3pc on the month and 13.2pc on the year, customs data showed. Trade sources attributed the decline to rising seaborne scrap prices in November and December. Trade sources said lower bookings were expected given the lunar new year holiday in Taiwan on 8-14 February, with mills likely to have been prudent in their procurement since November as delivery of containerised scrap usually takes 8-10 weeks from the signing of an agreement. The US remained Taiwan's top ferrous scrap supplier in February, providing 81,249t, although this was down by 32.6pc on January and 25.1pc on the year. Ferrous scrap imports from Japan fell by 10.3pc on the month and 15pc on the year to 55,510t in February. Imports from Dominican Republic rose by 7.1pc on the month and 16.9pc year on year to 17,563t. Scrap supply from Australia fell by 47.8pc year on year to 9,921t. Trade sources said underwhelming fundamentals in Asia meant Australian sellers focused on south Asia, where they could achieve stronger margins. Looking ahead, a slowing construction sector could mean lower scrap imports. "The shortage of manpower and rising building material costs have impacted the initiation pace of new construction projects," the Taiwan Institute of Economic Research said on 25 March. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Japan’s SMM eyes Li-ion battery recycling plant by 2026


28/03/24
News
28/03/24

Japan’s SMM eyes Li-ion battery recycling plant by 2026

Tokyo, 28 March (Argus) — Japanese battery cathode producer Sumitomo Metal Mining (SMM) plans to set up a lithium-ion (Li-ion) battery recycling plant in western Japan's Ehime prefecture by June 2026. The recycling plant is expected to have a processing capacity of around 6,000-7,000 t/yr of black mass, equivalent to batteries for around 60,000 electric vehicles, a company representative told Argus on 28 March. Black mass is the shredded remains of cathode materials such as nickel, cobalt and lithium. The company will start construction sometime during March-April 2025, but the timing for commercial operations was undisclosed. SMM has also entered into a partnership with nine domestic recycling partners to build a supply chain for collecting used Li-ion batteries, the company representative added. SMM produced cathodes using nickel and cobalt from recycled Li-ion batteries in June 2023. Domestic battery producer Prime Earth EV Energy proved the quality of SMM's used cathodes in performance testing. The recycled ratio of nickel and cobalt used in the test was more than 6pc and 16pc respectively. This exceeds the standard rates that EU battery regulations tentatively set as minimum recycling requirements for each material, a SMM representative previously told Argus . The EU regulation is expected to take effect from 2031 after approvals by member countries. By Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Centaurus' Jaguar Ni mine in Brazil eyes 2027 output


28/03/24
News
28/03/24

Centaurus' Jaguar Ni mine in Brazil eyes 2027 output

Singapore, 28 March (Argus) — Australian mining company Centaurus Metals said that its Jaguar nickel sulphide project in Brazil is undergoing a feasibility study and aims to start production in mid-2027. Jaguar, bought from Brazilian mining firm Vale in 2020 , is estimated to hold 109mn t of 0.87pc grade nickel for an estimated 948,900t of contained nickel. The nickel product will be largely targeted at the Atlantic market, with expectations that demand will strengthen in the region. "Demand for nickel we believe is not going away. And if you look at what's going to happen in the US and European markets in particular, nickel will probably be a bigger part of the battery composition than anywhere else," Centaurus' managing director Darren Gordon said at the Tribeca Futures Commodities conference held in Singapore on 26 March. "There's a huge amount of nickel that still needs to come into the market." Many Australian mining firms have struggled with a slump in global nickel prices earlier in the year because of a supply glut caused by increased volumes from Indonesia, coupled with a slowdown in demand. Several Australian mines have halted operations , while other processing facilities were placed on care and maintenance programmes . But Centaurus is hopeful that Jaguar will be able to compete on a cost and environmental basis with Indonesian supplies. "Nickel is going to continue be supplied out of Indonesia in very large ways so we are going to compete on costs. And we think that when we deliver the feasibility study, we will be able to demonstrate that we can compete on costs. But overlay on that, we have this very low carbon footprint associated with our project," Gordon added. Centaurus said Jaguar is one of the lowest carbon footprint nickel project globally, following a review done by a metals and mining ESG research company. Once operational, greenhouse gas emissions from the project are forecast to be 7.27t of carbon dioxide/t of nickel equivalent, which is assessed to be lower than 94pc of other global nickel production. By Sheih Li Wong Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more