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Raw materials look down, but
scrap firmer than iron ore Last week both iron ore and scrap prices decreased indicating that the market globally is
weakening slightly as the summer is starting in China and the Ramadan has begun in
Turkey and the Middle East.
Iron ore settled last week at levels close to $55/t CFR Qingdao according to Kallanish
price index, the lowest level since October last year. Speculators in the futures Chinese
steel market are betting for a decline of finished steel prices into June and the first
corrections have been seen already in the coils sector.
Meanwhile scrap in Turkey also corrected downward due to lower prices from the US
and slower activity during the Ramadan period. The first effects of the lower scrap price
in Turkey have been seen already in Europe where June settlements are set to lose
some €5-10/t compared with May levels in most countries.
It is worth noticing that currently scrap is traded at a premium of over $210/t against the
iron ore; this is a relatively high differential compared with the one registered in June last
year at some $190/t.
Last week the global news were filled with comments over the announcement by
President Trump to withdraw from the Paris Climate Accords. In this weekly issue we
analyse in details the mixed reactions from the steel sector in the US.
Meanwhile the Italian government has finally given the go ahead to the sale of Ilva; the
authorities accepted the bid by AM Investco, a joint venture between ArcelorMittal and
Marcegaglia. The sale is set to give a new boost to the consolidation of the European
market and increase the pricing power of the largest global steelmaker.
In conclusion, in our weekly feature, we take a close look at the scrap market in China.
While the country has lowered its scrap demand forcing merchants to look for export
opportunities, this trend is not expected to continue. Steelmakers in the country are set
to boost further their scrap requirements and exports are not expected to continue for a
long time.
PAGE 3
Are Chinese prices starting to fall?
PAGE 4
How will the European market change after Ilva becomes part of ArcelorMittal group?
PAGE 8
How is Chinese scrap market developing?
In this week’s issue: Top News:
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Iron Ore 62% Fe / Qingdao CFR USD/t
W-o-w avg change -0.07%
02 June 2017 $ 55.83
01 June 2017 $ 55.71 low
31 May 2017 $ 57.14
30 May 2017 $ 58.49 high
29 May 2017 $ 58.40
Average $ 57.12
26 May 2017 $ 58.24 low
25 May 2017 $ 60.34
24 May 2017 $ 60.47
23 May 2017 $ 61.90
22 May 2017 $ 62.92 high
Average $ 60.77
Date published: 6 June 2017
PAGE 6
In which direction will Turkish prices head?
PAGE 5
What will be the effect on the US industry of Trump’s announcement on the Paris accords?
Iron & Scrap
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Global Overview
www.kallanish.com Copyright 2017 Kallanish Page 2
Date published: 6 June 2017
North America:
US sheet prices stay in holding pattern
OCTG prices wait on 232 news
Sources split on Paris accord
Europe:
Italian government accepts bid for Ilva from AM Investco
Scrap prices in Europe looking down
Plate prices in NW Europe down
Asia:
Iron ore down despite BHPB fire
Vietnam imposes quotas on PPGI imports
Chinese steel futures fall
Middle East:
Turkish scrap dips on US sale
Turkish mills release lower July-shipment rebar export quotes
Turkish market awaits new coil prices from CIS
Turkey's April rebar exports rise on Europe/Americas surge
Latin America:
CSP stops slab production due to accident
Samarco restart remains uncertain
Metinvest’s Avdiivka coke plant runs at full capacity
Mechel's coking coal sales slump on reduced exports
CIS coil price stable so far
CIS:
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Date published: 6 June 2017
Word of the Week
Limestone Along with iron ore and coke, limestone is an important
ingredient in blast furnace iron making. The function of
limestone is to react with impurities introduced by the other
two ingredients to form a slag which can be removed from
the furnace without contaminating the iron. The heat inside
the blast furnace converts limestone into calcium oxide and
CO2 gas. Calcium oxide readily reacts with impurities like
silica, sulphur, alumina and magnesia to form a slag. This
gradually filters down through the furnace to settle on top of
the liquid iron where it can be tapped off.
Limestone
SAMPLE