Amid the silence in Turkey’s import scrap market, deep sea scrap prices for Turkey softened slightly early in the week. Turkish mills’ appetite for deep sea scrap is weak and they state that they do not have profit margins, especially in the rebar segment. On the other hand, scrap suppliers are not in a rush to do deals, for the same reasons as a week earlier, namely, the slow pace of collection and since they say collection prices do not give them room to cut their offer prices to Turkey.
It is heard that an ex-Baltic deal was closed by an Iskenderun-based producer for 23,000 mt of HMS I/II 80:20 scrap at $380/mt CFR. The cargo will be shipped in early June. Accordingly, SteelOrbis revised its ex-Baltic scrap price to $380/mt CFR, down $4/mt.
Another booking was done from Venezuela by an Izmir-based producer for HMS I/II 80:20 scrap at $372/mt CFR. SteelOrbis hears that there are special circumstances in this deal and so it is not considered as a benchmark.
Turkey has concluded at least 27 deep sea scrap deals for shipment in May. This number is similar to its purchases for shipment in April. The overall deep sea cargo needs of Turkey have decreased since the beginning of 2024 due to the lack of steel demand in its local market. With the export markets being mostly out of reach for Turkish mills, domestic demand has a larger impact on prices of steel and raw materials. Some Turkish mills are focusing on import semi-finished steel purchases to obtain the margins they cannot obtain by using scrap.
European scrap exporters are still paying €315-320/mt DAP for scrap collection. With the dollar at 1.077 against the euro, the current scrap price levels from Europe on CFR Turkey basis are barely acceptable to sellers. Shortages of scrap continue to be observed in the EU, where domestic scrap prices are more attractive compared to the bids received from export yards, SteelOrbis observes. The same situation is seen in the Baltic region. When export yards cut their collection prices, scrap flow slows down. Additionally, several US suppliers have concluded sales to alternative regions such as Mexico and the EU, reducing the pressure on them to conclude sales elsewhere. Market sources report that scrap flow in the local US market is also slower than usual.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved down by 1.04 percent week on week. The prices are now 0.39 percent lower month on month in the deep sea segment, with prices being in the range of $377-383/mt CFR.
US domestic scrap prices in the Northeast have settled sideways in May compared to April. US Ohio Valley scrap prices are still settling and the buy-cycle is expected to be concluded by the end of this week.
SteelOrbis has learned that the current price for Mexican domestic shredded scrap has remained unchanged over the past week at MXN 6,250/mt ($363/mt). Additionally, HMS I/II scrap prices have remained stable over the same period at MXN 4,650/mt ($270/mt) ex-works.
Over the past week, local scrap prices in Italy have gained an average of €5-10/mt. Steel mills remain very concerned about the situation in the finished steel market, where they are struggling to close sales and obtain new orders, operating with very compressed or even negative margins. Some traders share this view and are inclined to think that prices will remain stable in May as steel mills are unlikely to be able to absorb further increases.
What is driving scrap prices up is in fact the scarcity of available raw material and this makes some market players more optimistic. “There is more scarcity of material here than in the rest of Europe. We are heading for stock depletion,” as one source noted.
In the Spanish scrap market, local prices have risen by €10-15/mt in the last two weeks. According to sources, these increases are due to the need of steel mills to obtain faster deliveries in order to take advantage of lower energy prices, thus lowering their needs for imports.
The Japanese scrap export price in the Kanto tender increased by JPY 1,503/mt on May 9, rising for the second consecutive month. In the Kanto export tender, the highest bid was at JPY 52,590/mt FAS. As a result, the dollar-based price has increased by $5/mt from $333/mt to $337/mt month on month.
Accordingly, SteelOrbis’ reference price for ex-Japan H2 scrap has moved up from JPY 51,400-53,350/mt ($328-340/mt) FOB to JPY 51,400-53,600/mt ($330-344/mt) FOB.
The leading Japanese EAF steel producer Tokyo Steel has increased its scrap purchase prices only for its Utsunomiya plant, by JPY 1,000/mt as compared to the levels shared on April 19. Despite the announcement, Tokyo Steel’s general range for H2 grade scrap has remained at JPY 50,500-51,500/mt ($330-337/mt) depending on the plant.
Having remained soft over the holidays, Taiwan’s import scrap prices have continued to move down this week. Offers for ex-US HMS I/II (80:20) scrap in containers are at $352-360/mt CFR, moving down from $358-361/mt in the previous week. Ex-Japan offers for H1/2 (50:50) scrap by bulk to Taiwan offers have remained at $368-372/mt CFR.
Trade activity in the import scrap market in Bangladesh has remained moderate, while most prices heard for containerized scrap have remained stable in occasional deals this week. Most offers for shredded scrap in containers have been voiced at $425-430/mt CFR, depending on the origin, mainly the same as last week. Meanwhile, according to sources, several deals for small quantities of ex-Australia HMS I/II 80:20 scrap have been signed at $400-405/mt CFR this week, the same as last week, while another booking for ex-Brazil HMS I/II 80:20 scrap has been reported at $410/mt CFR. Furthermore, a deal for ex-Chile HMS grade scrap has been signed at around $400-405/mt CFR this week. As for the bulk segment, most Bangladeshi mills continue to show minimal interest in deep sea purchases given the extremely slow end-user demand and the resulting production cuts, coupled with the approaching monsoon season next month. Indicative offers for ex-US HMS grade scrap are standing at $405-410/mt CFR, the same as last week.
Although most Pakistani scrap buyers have remained inactive given the extremely low finished steel demand in the country coupled with continuing liquidity issues, new offers for import scrap in Pakistan have posted a slight increase this week. Some occasional deals were concluded at $420-424/mt CFR levels on average at the end of last week, while by the end of this week some bids have been heard at $425/mt CFR, but sellers are not willing to accept this level, according to sources. Meanwhile, offers for ex-EU/UK shredded scrap in containers have been voiced at around $430/mt CFR, against $425/mt CFR last week, while some market insiders have already reported offers at as high as $435/mt CFR.