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Press Release - Steel price set to drop - 18 January 2011

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Although steel prices are still rising, they are expected to peak shortly. Scrap prices in Europe and Turkey seem to have peaked after a rapid climb since November.

 

Steel prices have risen this year due to the higher quarterly prices for iron ore and coking coal and to strong steel demand from traders and stockists.

 

Turkey is one of the main third country buyers of EU scrap. Poor finished demand for Turkish exports means its mills are unwilling to pay higher prices for scrap, according to one trader. “It seems Turkish producers want to stop buying because it is not easy for them to sell their final products,” he says, suggesting “we are in a bubble... I hope that it will not burst.” Scrap costs are too high in relation to finished product prices.

 

Spain buys a lot of scrap from the UK. Consequently UK prices too may soon stop rising. “The market is now driven by speculation, instead of real demand. New scrap price increases may be too much and we fear a change of trend,” a Spanish scrap merchant told SBB.

 


 

Contact SBB for more information: marketing@steelbb.com or +44 207 645 9400.

 

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