Scrap metal remains competitive

The global outlook for ferrous scrap prices has been overshadowed by trade tensions over Turkey, the world's largest importer of scrap metal.

However, when policies, tariffs and currency valuation are set aside and the current pricing environment for raw steel is considered, scrap is a relatively good commodity.

The recent fall in Turkish import prices for scrap metal, coupled with the resilience in iron ore prices, has brought the ratio between ferrous metal and iron ore prices to its lowest point in half a year.

While iron ore has surged in the past few months due to restocking and a surge in the steel industry, the price of ferrous scrap, driven largely by Turkish imports, has fallen to steadily lower levels.

Higher scrap prices earlier this year also contributed in part to an increase in Turkish imports of semi-finished products such as billet and plate, which have taken on the role of more competitive materials for steel production than scrap metal.