Following the increases recorded last week, bearish factors have started to prevail in Taiwan’s import scrap market.
From the highest level of $440/mt CFR fixed in deals last week, offers for ex-US HMS I/II 80:20 scrap in containers are still at $450/mt CFR. Market players stated that there were bookings closed at $440/mt CFR earlier this week, but as of today this level is not considered to be workable for suppliers and prices are estimated to be around $445/mt CFR in the absence of new actual deals.
Meanwhile, offers from Japanese sellers to Taiwan for H1/2 50:50 scrap by bulk are in the range of $475-480/mt CFR, as compared to $485-492/mt CFR last week. Still, this level is considered unacceptable by buyers given lower-priced US origin scrap. Tokyo Steel’s move to lower its prices by another JPY 500/mt today, August 27, has worsened the mood in the market. This is the second reduction the mill has announced over the past two weeks - having reduced them by JPY 500/mt at the end of last week. “Scrap shortage on the Japanese side continues,” a source stated, adding that the lack of supply is seen particularly for higher grades such as shindachi scrap since car production in Japan remains disrupted because of the lack of car chips.
Domestic scrap demand in Taiwan is still at normal levels, SteelOrbis understands. With the impact of Covid across Asia, Japan is now taking further measures to prevent case numbers rising, while Vietnam is failing to control its rising numbers. However, Taiwan seems to have brought the spread of Covid-19 under control, and with vaccinations, sources expect no impact on trade. Local Taiwanese rebar prices are still at TWD 22,000/mt ($787/mt) ex-works, but amid buyers’ expectations of a further decrease in quotations trade has not improved yet, SteelOrbis understands.