FOCUS: Global steel and scrap markets turn upside down on triple whammy

The global steel and ferrous scrap markets have been turned upside down on a flurry of unexpected trade flows caused by a combination of economic jitters in Turkey, trade defences by the United States and production cuts in China.

Economic jitters in Turkey The plunging Turkish lira and import tariffs by the US have caused Turkish import prices for ferrous scrap to drop, with scrap traders seeking arbitrage opportunities in Asia from the US East Coast in a surprising twist of events. “To hear the US East Coast offering scrap to Asia is phenomenal, as the East Coast usually sends a large quantity of scrap eastwards to Turkey,” a Vietnamese trader said. There is at least a $30-50 per tonne west-east arbitrage window open for traders to take advantage of, especially with export prices from the US east coast dipping by close to $30 per tonne on an fob basis on August 17.  Europe has also been affected, with at least 10 offers for large quantities of Europe-origin scrap to major import market...

Published

Paul Lim

August 20, 2018

07:55 GMT

Singapore