Scrap goods are now selling for a specific cost in factories.
Rewritten Article:
Black Metal Scrap Prices on a Slide for the Rest of Summer
Brace yourself, scrap dealers! The predicted rates for black metal scrap this week have plummeted to an unprecedented 23,000 rubles per ton, reaching a new low for 2025. It seems like our metallurgical pals are playing hardball with their wallets after a brief price hike in April when the scrap market was stockpiling resources. The anticipated decline in scrap metal prices might persist until the end of the month and continue to leave us high and dry throughout the summer.
On May 12th, most metallurgical enterprises sounded the alarm with a 1,000 ruble reduction in the purchase price of black metal scrap. This move has essentially knocked the price forecast of this tasty metallurgical treat down to a measly 23,000 rubles per ton in the Central Federal District, considering transportation costs. You heard it right, folks - that's the final straw since the start of 2025, according to Alexander Shikhranov, the big cheeze at Metals & Mining Intelligence (MMI).
Ain't no party like a Shikhranov party, because this guy ain't just here to rain on our parade – he's predicting that the price drop isn't even close to finding its rock bottom yet! He suggests that the current prices and the dwindling demand from steel-producing factories could lead to a scrap collection shortage, with a scrap collection volume of a mere 18.5 million tons in 2025 assuming a positive steel market scenario with production not exceeding 65-69 million tons of liquid steel by year's end. That's a 9% decrease compared to last year's scrappy triumphs!
Here's a fun fact for ya: black metal scrap plays a vital role in the electric steelmaking process, contributing to approximately one-third of steel production in the country. But, according to the "Chermet" corporation, Russia's steel production dipped a staggering 7.2% year-over-year in April, settling at a measly 5.7 million tons. If you've been feeling sluggish with that January-April production numbers, you're not alone – we're looking at a 4.5% decrease, totaling 23.1 million tons. BCS jokingly notes that April 2025's steel output was the weakest since its whimsical debut this year.
Shikhranov foresees another 1,500-2,000 ruble dip in black metal scrap prices by the end of May, maintaining a groovy vibe throughout June and August. But, as for the metallurgical companies we've been pestering for comment, they couldn't be bothered to respond, given their apparent prior engagements.
Yep, you guessed it – the cost of this enchanting metallurgical goodie wasn't screaming "DIVIDEND!" at the start of the month. According to the "Rusmet" rating agency's survey of experts, black metal scrap in the Central Federal District could be had for 19,650-19,900 rubles per ton, excluding transportation costs. But, the first week of May witnessed a surge in shipments.
Now, let's talk about the belly of the beast – the Central and Ural Federal Districts. Scrap prices have experienced a 1-2% uptick since early April, with export quotes showing a rosy outlook at the beginning of May. Why, you ask? Well, Turkish metallurgists were busy contracting new batches to replenish their stocks ahead of the Kurban-Bayram celebration. In these boisterous times, scrap prices on CFR Turkey terms skyrocketed by a whopping ten bucks, settling at a trim $340 per ton last week.
The Rags-to-Riches-to-Rags Journey of Non-ferrous Metal Prices
Victor Tarnavskiy, the head of the analytical department at "Metal Supply and Sales," reckons that the spring of 2025 saw mills nibbling away at their winter stockpiles and restocking on scrap metal. But, he ain't betting on the long run – positive price trends are bound to die out within a few weeks as enterprises restock their shelves, leaving us in a perpetual game of cat and mouse. Boris Krasnожеnov, the head of the securities market analysis department at Alfa-Bank, echoes a similar sentiment, stating that given the current malaise in the black metallurgy sector, it's premature to splash the cash on a fundamental rise in steel and metallurgical raw material prices.
Victor Koveshnikov, the director of the association "Ruslom.com," informs us that metallurgical plants always keep at least a monthly reserve of raw materials. But alas, the joyous increase in metal product consumption is as elusive as a unicorn, leaving consumers like Alexander, Mr. Chermet, and BCS scratching their heads about the market's unraveling disposition. The situation looks desperate due to the market's dismal domestic demand, which might change if the key rate plummets, setting construction activists free and whipping up some Russian metallurgists' export capabilities, or if international sanctions get flipped the bird, Mr. Koveshnikov optimistically speculates.
And there you have it – a rugged analysis of the price swings in black metal scrap and the challenge we might face to keep our heads above water in the unforgiving sea of the scrap market for the reminder of 2025. Godspeed, fellow scrap enthusiasts!
- The troubles in the black metal scrap market have extended to the finance sector, with a predicted decline in prices potentially impacting the revenue of scrap dealers.
- In the broader business context, the fluctuation in black metal scrap prices could affect steel production, as black metal scrap contributes significantly to the electric steelmaking process, making up one-third of steel production in the country.
