One Man’s Scrap Is Another Man’s Treasure

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  1. Marc R Azous says:

    I’m not sure how they came up with a “Turkish rate” as Turkey buys their scrap regionally (Europe, Black Sea, and North Africa). Though occasionally Turkish mills buy from yards in the northeast US.

    India imports globally as does China. And there’s a big difference in price between container-prices and bulk shipment prices; with bulk shipments fetching premium prices. Further, there are not many scrap yards that can deliver bulk shipments (30,000 tons) on a consistent monthly basis.

    South Korea, Taiwan, Thailand, Vietnam, and Indonesia all import vast quantities of scrap iron by ocean container. One of the leading price-drivers is the cost of ocean freight. Whereas bulk shipments have a lower cost-per-ton than containers, there are more container-importers than bulk-importers.

    Scrap iron prices have been depressed for the last six years, mainly due to overproduction of new steel coupled with low demand for finished steel. However, the timing of this futures contract is great. The last two months have seen renewed demand for scrap iron all over Asia and India with buyers aggressively pursuing new supply-sources. 2017 is starting off well.


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