Ore Based Metallics

Metallics prices upgraded due to higher steel prices and improved sentiment towards demand

Global scrap prices have stabilised or increased in late 2022, supported by seasonal weather disruption and inflated freight rates. This, coupled with improved sentiment following the China reopening, has triggered a wave of restocking that led us to revise upwards the forecast for 2023 Q1 and slightly for Q2, when we believe steel prices will give support for higher metallics prices, in particular scrap.

For pig iron, the recent increase in scrap prices across major demand centres should prevent strong declines in the short term. Meanwhile, there is an upside risk to our forecast in case demand improves more than expected since Brazil remains the sole large source for pig iron, particularly to the USA and Europe. However, with the export tax removal in India the price upside could be limited by higher exports from the country.

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