Scrap prices remained rangebound at the start of 2024

Scrap prices were flat-to-down in major regions on the back of additional supply and slow demand. Asian prices started 2024 on a better footing than those in Europe and the USA. Scrap prices typically rise in January due to tighter supply of both prime and obsolete grades of scrap. However, steady automotive production and a milder winter in most major supply markets resulted in greater availability of scrap.

Scrap prices weakened in the west on higher availability

The CRUmpi declined by 1.1% m/m to 330.7 in January, compared to a 5.5% m/m increase in January 2023. This atypical m/m decline for the index was driven by a mix of better seasonal supply and weaker demand across major regions. The US market witnessed lower m/m bids for prime and secondary grades from steelmakers which led to a m/m price decrease, although to a lesser degree than initially suggested. Scrap export sales to Turkey also weakened for US suppliers as Turkish buyers lowered their bids, citing their inability to pass through costs to consumers.

In Europe, scrap buyers and sellers were slow to return to business from the holidays. Sellers intended to raise prices by €5–10 /t, given the recent upward momentum in finished steel prices and restricted availability. However, scrap prices ended up declining slightly m/m due to lack of buying interest as many buyers restocked ahead of the new year and steel end-use demand did not significantly pick up.

In Asia, South Korean and Chinese markets were outliers to the general flat-to-down trend for scrap prices. The price upswing in both these markets was a consequence of strong restocking demand. Several EAF based mills in China built up stock well ahead of the upcoming Chinese New Year holidays in February, as they anticipated scrap availability to drop from late January. Meanwhile, some steelmakers in Japan and South Korea decided against stocking up scrap because of weak steel market conditions amid high finished steel inventory and upcoming maintenance schedules.

Pig iron prices rose in most markets, except for Europe

Among ore based metallics, prices of pig iron rose m/m in all major regions aside from Europe on improved buying, while those of DRI/HBI remained stable m/m. US demand for pig iron was robust at a time when availability of Brazilian material increased after tightening in the previous month. Meanwhile, supply from Ukraine improved with the opening of new sea corridors. European buyers were slow to return from the holidays, despite reduced access to Russian supply as part of the new EU sanctions package, which includes restrictions on pig iron imports and started in December.