Near term metallics price trend will vary across regions

Metallics prices stalled in January on the back of additional supply and quiet demand. We expect prices to be supported in the USA, Europe, and the CIS in the short term, while Asian prices will be under pressure.

In the markets outside Asia, scrap supply is expected to tighten as winter progresses. At the same time, restocking is expected to pick up and steel production will resume, particularly in Europe, where supply was adjusted to weak demand conditions in 2023 H2 and is now coming back online. 

In Asia, with the approach of the Chinese New Year and Tet holiday in Vietnam, we expect to see a slowdown in buying interest, and prices should be under pressure as a result. However, the volatility in transport costs along with limited supply from the west represent upside risks for Japanese export prices, as other sources of material to the Asian region will be limited and potentially more expensive.  

Pig iron prices in the USA are expected to remain stable as buyers have sufficient inventories on hands. Supply from Ukraine has improved with the opening of new sea corridors, but it is yet to be proven reliable. In the meantime, Brazil will remain the main supplier to the US market. Pig iron prices in Europe remained stable m/m in January and are expected follow the uptrend of scrap prices in February.  

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