8 Things that we Learned at SteelMint’s 3rd Steel Scrap & Raw Materials Conference

SteelMint Group organized 3rd Steel Scrap and Raw Materials Conference : in Bangkok, Thailand. This two day conference spanning from 11th-12th Sept'17 was attended by scrap and semi-finished steel buyers, suppliers and steel mills owners from various countries like Vietnam, Pakistan, Bangladesh, Indonesia, Thailand , Malaysia & India which are emerging markets for steel scrap and other raw materials. The event observed participation from over 360 participants.

The conference aimed at following:

1. How will China impact the dynamics of global Scrap & Steel market?
2. Will Pakistan become the second largest scrap importer in Asia?
3. Will Bangladesh double its steel consumption by 2022?
4. Will SE Asia remain import dependent or increase its steel production?
5. What will be the impact of Indian metal recycling policy?
6. Will ship breaking remain a scrap feeder?
7. How Scrap charge rate can be increased from existing 18-20% to 50% in BOF’s?
8. How to decrease the operating costs of Electric Arc Furnaces

The key takeaways of the conference were as follows:

1. Steel prices in China likely to remain high till next 3-4 months. Steel consumption in China may be up 2-3% Y-o-Y in CY17. Steel capacity cuts announced in 2017 had bigger effect on production quite of them were operative. This resulted in demand-supply imbalance which in turn resulted in price hike.

2. Graphite electrodes shortage is likely to continue for 1 year which may keep its prices supportive. Electrodes cost have increased sharply to USD 30-35,000/MT. Owing to this, electric arc furnaces may face difficulty impacting billet output. Finished steel exports may increase by considerably larger percentage than semi finished steel exports.

3. Imported scrap prices in global market are less likely to increase further.

4. Chinese scrap exports will increase in the near term following plants closure. But for its impact on global market, market participants carry mixed views. Some are of the view that majority of scrap will be absorbed with Chinese steel sector for local consumption. While others believe that China will continue exporting scrap.

5. Supply of ships for recycling will remain strong and much will be imported and will be consumed locally in Pakistan, India, Bangladesh, Turkey.

6. With rising steel making capacities, scrap imports to Pakistan will gain momentum further. Pakistan’s crude steel output in CY16 was reported at 3.6 MnT which is expected to rise to 5 MnT 12-18 months down the line. Devoid of blast furnace, Pakistan relies on scrap as feed to its IF & EAF. In line with this the country will increase its scrap imports significantly. In 2016, Pakisan imported nearly 2.4 MnT scrap. Pakistan based steel mills have been receiving bulk offers for Shredded scrap from China at USD 340-345/MT, CFR but in last couple of weeks, however no deals were heard to have concluded.

7. Bangladesh scrap imports are likely to nearly double in next two years. The country imported nearly 2.29 MnT scrap in CY16. Amid port issues, Bangladesh based steel mills are lobbying with the government to resolve port issues to ease out scrap imports. Govt. has already given 24 hours loading facility at Chittagong port now for bulk vessels and in next 6-8 months it is expected that it may be done for containerized vessels as well.

8. Japan’s leading steel maker - Tokyo Steel confirmed to have imported Chinese scrap in the recent past and the scrap was reported to be of good quality. However presently they are focusing on Japanese domestic scrap.