Next week (17 Nov), the European Commission is set to publish the first draft of the EU waste shipment regulations (WSR) review. The draft is widely expected to contain a ban, in some form, on scrap exports, both ferrous and non-ferrous. Observers expect the bans to be a total ban on exports to non-EU countries and/or a ban on exports to non-OECD countries that do not meet the EU’s current waste processing requirements. According to the most recent statistics (2019), the EU exported about 13% of its total scrap supply to non-EU buyers (or 14.5 Mt) of steel scrap. This volume, assuming a ban is implemented, would then be sold to buyers inside the EU instead. Should the ban, instead, be done on exports to non-OECD countries not complying with EU waste standards, this would affect about 3-4 Mt of scrap that currently goes to Egypt, India, Pakistan, China and a handful of other Asia-Pacific countries.
German steel producers are reportedly bullish about near term demand despite lower production volumes. With demand from the automotive sector having slowed down, producers expect inventories to start rising over the coming months, according to a recent survey conducted with participants of the BlechExpo fair. German steelmakers say that their immediate outlook is still rather robust and that sentiment has received a boost from the latest round of US-EU talks and the decision to replace current US tariffs with a so-called tariff-rate quota (TRQ) beginning in 2022. Stocks are nonetheless rising across the EU, including Germany, with multiple reports that producers have been seeking additional warehouse space for excess HRC production.
Following several weeks of consecutive upgrades, potash prices in Europe seem to have levelled out again with Baltic Sea spot prices hitting a maximum of US$ 511/mt FOB or just US$ 2/mt higher than the week before. Northwest European producers have been targeting granular MOP prices at about EUR 560/mt CIF, though prevailing market prices appear to have stalled at EUR 550/mt CIF or thereabouts, market players report.
Prices for Russian wheat have made further gains in the last few days after major buyers purchased considerable ship volumes at the end of October. Egypt, the world’s biggest wheat buyer, bought 180,000mt of Russian wheat in its most recent tender on 27 October. Russian agricultural consultancy Sovecon said that wheat was up by US$ 2/mt week-on-week to US$ 327/mt FOB. Russia’s overall wheat exports are still down by some 32% since the beginning of the 2021/22 marketing season (that started on 1 July) due to the combined impact of lower output and the increase in the state export tax, which is set to see further hikes this week to US$ 69.9/mt.
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