Non-stop drop in world steel market spread to scrap market. Overseas steel mills decelerate the pace to purchase scrap, which pulls down world scrap average price by 50-100 US dollars from the deal in mid April.

The scrap market's downslide is anticipated to continue in short run, while the falling space is slim.

Falling Scrap Demand Cools Scrap Price

Overseas steel mills' production stops growing up and strong scrap demand calms down obviously.

Take US for example. During the week ending on May 29, US's crude steel production totaled 1.766 million short tons, up 72.2 percent year on year, or down 1.2 percent over one week earlier; steel capacity utilization rate was 73 percent, down 2.0 percent. After hitting the peak of 80 percent at the end of April, the rate is hovering at around 74 percent during May. There is no support for further recovery.

Steel head ArcelorMittal has no plan to cut production, but the price drop in steel will definitely weaken the operational activity. It is predicted that the mill's May production will keep stable versus April, or even decrease slightly.

Key destination of European and US 's scrap, Turkey has withdrawn from scrap buying markets due to bleak local demand. The scrap import and scrap trades perform insipid.

Scrap Prices Worldwide Head down

Global scrap prices have dropped an average 50-100 dollars compared to mid April.

Europe's HMS 1#2 (80:20) and shredding scrap is currently priced US$ 303-308 per tonne and US$ 308-313 per tonne (FOB, Rotterdam port), a drop of 25 dollars from early June. Another scrap producer US quotes HMS 1#2 (80:20) and shredding scrap at US$ 310-315 per tonne and US$ 315-320 per tonne (FOB), down 40 dollars.

The plummeting price works little in pushing up buyers' interest. It is heard that Turkey 's steel mills buy two vessels scrap at the price of US$ 340-350 per tonne (CFR). One Turkey 's buyer said they will rejoin in the scrap market unless rebar market warms up in demand and price.

Japan ’s scrap market is experiencing the similar hardship. Up to June 4, Japanese domestic scrap price has realized a successive-four-week drop. Average price of HMS 2 in three markets Kanto, Chubu and Kansai slid by JPY3000 to JPY34,098 per tonne (US$ 370).

South Korea 's steel mill Hyundai Steel ordered steel scrap from Japan , with the offer plummeting. New scrap was offered by JPY 38,000 per tonne (FOB, Japan ), down JPY 1,800 from the previous deal. H2 was JPY 31,000 per tonne. Total bookings was around 30,000 tonnes. Another steel mill Dongkuk Steel ordered 20,000-25,000 tonnes HMS from Japan at the price of JPY 33,000 per tonne (around US$ 363 per tonne, FOB). The bookings will be shipped out in June and July.