In a deal closed on February 27, Turkey’s deep sea scrap purchase prices collapsed and declined by almost $20/mt as compared to the previous confirmed booking done from the US. This new deal pushed benchmark HMS I/II 80:20 scrap prices below the psychological threshold of $400/mt CFR Turkey. During the rest of the week, sentiment in Turkey’s import scrap market was negative. Several market sources reported that there are too many offers seeking buyers in the market and that sellers’ offer prices are soft. European scrap suppliers have reduced their collection prices towards €320s/mt DAP, signaling that they are not much inclined to resist the price fall under the current conditions as they did last time. Since Turkey’s domestic and export finished steel sales are on the low side, with the rebar segment almost stagnant ahead of Ramadan, there is no support to change the picture in the scrap segment.
With a relatively old deal disclosed to the market today, March 1, ex-US scrap prices have moved further down in Turkey.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved down by 5.98 percent week on week. The prices are now 8.98 percent lower month on month in the deep sea segment, with prices being in the range of $380-390/mt CFR.
Scrap market sources throughout the US say they still believe that March settled prices are likely to tick downward. Similar to Monday this week, the broad expectation is that cut grades and shredded are likely to tick down by $20-30/gt in most parts of the US, whereas prime grade scrap could potentially soften by as much as $40-50/gt.
SteelOrbis has learned that the current price for Mexican domestic shredded scrap is now at MXN 7,400/mt ($422/mt), compared to MXN 7,700/mt ($439/mt) a week ago. Additionally, HMS I/II scrap prices are now being heard at MXN 5,800/mt ($331/mt), unchanged from last week.
February ended with prices still stable in the local Italian scrap market, with poor levels of supply and demand. One source commented, "A stable market is good for everyone, for us who sell and for steel mills that manage to stay supplied." On the export front, the market is quiet. Given the sharp declines in deep sea prices in Turkey, which fell below $400/mt CFR, and that prices for ex-Italy scrap are at $380-382/mt CFR Turkey, traders prefer to sell locally at more attractive levels.
For March, prices are expected to drop by €5-10/mt, "Steel mills know that scrap availability is tight, so they prefer not to lower their purchase prices by €20-30/mt and to risk not being able to buy when they need to.”, said one source. However, this is a precarious balance. "If something changes on the side of demand, everything changes," commented a trader.
In the Spanish scrap market, local prices have remained stable this week, while import prices have dropped by €5-10/mt. However, these are indicative prices as no deal has been confirmed at these levels. According to market participants, further declines are possible in both segments for the coming weeks.
The leading Japanese EAF-based steel producer Tokyo Steel has increased its scrap procurement price for its Takamatsu plant. This move has not changed the general scrap purchase price ranges of the producer and is considered as an adjustment for the Takamatsu region. Tokyo Steel’s general range for H2 grade scrap has remained unchanged at JPY 50,000-53,000/mt ($332-352/mt) depending on the mill.
Sentiment in Vietnam’s import scrap market is still negative. Market sources report that most steel mills have high levels of scrap inventories and do not want to buy at the moment. Vietnamese buyers are receiving offers for Japanese grade H2 scrap in the range of $390-400/mt CFR. Meanwhile, ex-US West Coast containerized HMS I/II 80:20 scrap remains at $370/mt CFR Vietnam fixed in deals. Ex-US West Coast HMS I/II 80:20 offers for bulk cargoes to Vietnam are at $400/mt CFR.
SteelOrbis’ reference price for ex-Japan H2 scrap has remained stable at JPY 51,500-54,100/mt ($341-359/mt). Dollar-based prices have declined by $2/mt on the lower end and by $1/mt on the upper end.
Taiwan’s import scrap market has continued to move down further this week, with offers softening amid the weakening of iron ore and scrap prices globally. Offers for ex-US HMS I/II (80:20) scrap in containers to Taiwan were at $375/mt early this week but have declined to $363/mt CFR by the end of the week, indicating a $10-12/mt drop week on week. Japanese scrap suppliers’ offers for H1/2 (50:50) scrap by bulk to Taiwan have moved down by $5/mt on the upper end to $380/mt CFR over the past week.
In Bangladesh, most offers heard for containerized scrap have remained stable but with a downward bias reported in new deals and bids. Specifically, offers for ex-EU/UK shredded scrap in containers have been voiced at $430-435/mt CFR, compared to $435/mt CFR last week. Meanwhile, a deal for ex-Australia shredded scrap has been reported at $425/mt CFR, with most offers standing at $425-430/mt CFR, the same as last week. Besides, offers for EU/UK HMS I/II 80:20 scrap have settled at around $410/mt CFR, against $410-415/mt CFR last week, with bids heard at $405/mt CFR. As for the bulk segment, both buyers and sellers have continued to avoid business this week, while indicative prices for ex-Japan H2 scrap and ex-US HMS grade scrap heard at $425/mt CFR.
Import scrap prices for Pakistan have continued to soften this week, but only rare deals have been reported as local buyers’ price ideas have kept moving down. Ex-EU/UK containerized shredded scrap offers are at $430-432/mt CFR, against $440/mt CFR last week. According to sources, several deals have been reported at the abovementioned levels for around 3,000-4,000 mt in total. Meanwhile, suppliers from the Middle East, from Dubai in particular, have offered shredded and HMS grade scrap at $450-453/mt CFR and $415/mt CFR, respectively, mainly the same as last week. According to sources, while some buyers have kept pushing their bids down, other have been less negative, expecting the trend to reverse in March given the more stable political situation in the country.