The Asian scrap market has shifted downward in line with the global trend fueled by lower Chinese export prices, along with a decline in iron ore prices and lower import scrap buying prices in Turkey.
In the week ended March 24, ex-US West coast scrap deals for late May or early June delivery were heard for HMS I/II 80:20 at $280/mt CFR South Korea, $265-270/mt CFR Taiwan, and $285/mt CFR Vietnam. Shredded scrap deals for the same delivery period were heard at $285/mt CFR South Korea. Taiwan continued purchasing HMS I/II 80:20 into mid-April with deals heard in the low $250’s/mt CFR Taiwan while no new deals to South Korea or Taiwan have been heard in the market due to their adequate inventories and preference for short-sea buys.
According to sources, mills in Asia are presently seeking scrap only in the short-sea region and will delay ex-US scrap commitments pending more market information. While US West coast exporters have adopted a wait-and-see stance and are not actively making offers, as SteelOrbis reported on April 18, short-sea purchases within Asia for HMS I/II 80:20 and Japanese H2, while on a slight downward trend, are proving resilient and according to one source, are “helping provide pricing guidance to the US West coast scrap market.”
Given Japanese and other alternative scrap sources, short-sea deals on bulk HMS I/II 80:20 are expected at $260-265/mt CFR South Korea from scrap originating within the region. According to sources, this translates to approximately $240-245/mt CFR Taiwan and $265-270/mt CFR Vietnam for HMS I/II 80:20 originating from the US West coast. A source noted, “If mills succeed in obtaining bulk HMS I/II 80:20 in the short-sea market below $260/mt CFR South Korea, then US scrap prices could move lower, though hopefully the Chinese situation will stabilize soon.”