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Impact of Covid-19 - Rise in Demand for Iron Ore and Steel

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by - 8/26/2020 263 Views

The effect of mining metals on the environment has promoted the use of recycled metals in the building & manufacturing business.

 

The majority of recycled metals used in this field are derived from demolition waste, one of the main sources of metal waste Although global steelmakers account for about 40%-60% of their production capacity, steelmakers in those countries are slowly booking scrap at higher prices. Owing to supply shortages, prices of iron ore have thus risen in the last week. Steel exports from Turkey to China rose by 74.9 per cent from January to May 2020 compared to the same period in 2019, the study said. China's steel imports from India have increased this year by 60 per cent compared to the previous year to 440,000 tonnes.

China’s Demand for Iron Ore 

The iron ore is mainly used in the manufacturing of iron. The bulk iron that is made is then used for steel making. Iron ore is the raw material used to make pig iron, one of the main steelmaking raw materials. The mined iron ore is used to produce steel at 98 per cent. Chinese iron ore futures extended on Thursday, sending spot prices up 11 months as mills purchased steelmaking material to fill the inventory in anticipation of strong demand in the months to come. Strong demand continues to fuel the market, the commodity strategists at ANZ wrote in a statement, in the midst of a favorable view of China's economic recovery.

India’s Iron Ore Shortage

The Steel Ministry has taken steps, according to a report, to prevent disruptions in the supply of iron ore and to reduce India's imports into selected countries for coking coal, the raw material for steel making. The steel industry faces problems in terms of raw material health both in the short term and in the long term in its annual report for the financial year 2019-20. A report says the steel ministry is working hard to ensure raw materials are safe for this sector. Iron ore and coking coal are the two primary raw materials which are used in steel production. "About 37 operating commercial mines (250 + mines in all) expired as of March 31 , 2020, which is projected to threaten the supply of 45-50 million tons ( MT) of iron ore by 2020-21.

Turkey’s Steel Exports

Steel exports from Turkey to China increased by 74.9 per cent from January to May 2019 to over $6.1 million compared to the same period in 2019, the Turkish Ministry of Trade said Trend. Due to low demand in local and export markets, the Turkish steelmaker didn't hurry to buy deep sea scrap. Nevertheless, the Turkish steelmakers are booking deep-sea scrap at a steadily higher price per week in the face of heavy Chinese prices for iron ore and steel. Purchases for Turkey of the Baltic Sea cargo increased by $13 and ended at 3,273 per tonne on July 22, 2020.

UK’s Steel Market

The UK's Intermediate Merchant Spot Market for Light Iron Scrap shifted in the week ending Friday, July 12, unchanged from June 12. The scrap generation didn't return to the UK until lockdown measures were introduced in March to contain the spread of the Covid-19 pandemic. As a result, there was a drop in the emergence of scrap from the disassembly of vehicles and white goods, and a decrease in the number of demolition projects. UK HMS 1&2 Cost increases at $255 / MT CFR to $5 for Indian port.

Conclusion

The growth of this market is due to the rising demand in developing countries for steel and urbanization & industrialization. Increasing concern about the rapid depletion of natural resources has also led policymakers in many countries to make favorable regulations for the metal recycling industry, which further propels the metal recycling market. If iron ore prices continue to gain traction in the coming days, we can foresee some more price revisions later.

 

Category : Metal

Tags : Iron Ore, Steel, Chinese iron ore, Turkey’s Steel Exports, UK’s Steel Market, Indian steel industry


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