Turkey’s import scrap quotations have continued to move up at a fast pace since a lack of availability is still observed. Although some market players stated their expectations of a slowdown in activity at around $380-385/mt CFR for premium grade scrap earlier this week, prices have exceeded expectations and have continued their upward movement, while ex-EU prices quickly reached $380/mt CFR.
Today, December 9, SteelOrbis has learned that the booking in question was done by an Izmir-based producer, with the cargo consisting fully of HMS I/II 80:20 scrap bought at $384/mt CFR, for prompt shipment. On the other hand, the number of deep sea offers shared with Turkish mills has increased this week to seven or eight, according to sources. Turkish mills are not showing much interest in offers at around $390/mt CFR. While the local US scrap market is set to move up in price in the first round of purchases, scrap flow in the US is also observed to be on the low side. Scrap flow in the EU has not recovered over the past week, though some sub-collectors report that there is a €5/mt softening in collection prices. The situation in the local rebar market has also changed this week, while traders have already filled their inventory levels and are more interested in selling before buying more rebar. There is a $10/mt softening in Turkish mills’ unofficial rebar offers to their domestic market.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap in CFR terms has recorded a 4.76 percent increase week on week. The month-on-month prices are now 11.59 percent higher in the deep sea segment, with prices being in the range of $380-390/mt CFR.
SteelOrbis sources previously confirmed that, while scrap prices were unlikely to settle until Wednesday, December 7, upward pricing is likely in regions throughout the U.S.
Later in the current week, scrap market sources in the Northeast, Midwest, and the Southeast of the US said that, while December prices have not settled yet, they believe that up $20-$30/gt will be where the market lands.
Sources have also indicated that scrap inventories in sellers’ yards are “extremely low,” which is directly linked to the months-long downtrend in mills’ paying prices.
“Scrap supplies in the Ohio Valley and Midwest are tight. Busheling is tight, P&S is tight; the mills are coming up short and the [scrap] dealers are down to the ground on scrap no matter what grade it is,” a source said, adding that the dealers that do have scrap are not especially motivated to sell because they believe that January prices will be higher.
Demand for scrap is also higher than initially anticipated. Not only are mills trying to buy more scrap, several are having difficulties procuring their “normal amount.”
Local Italian scrap prices have remained stable this week due to the holidays at the end of the week. A source said, “We will see next week what will be the mood for the end of the year.” The finished steel market in Italy is still weak, but there is also “a small recovery signal.” Energy costs are expected to be the driver of the market situation in the coming months.
The long-anticipated Kanto export tender in Japan has been closed successfully this time, while the price increased on dollar basis as expected by SteelOrbis amid better demand and sentiments. The last Kanto tender held in November had failed to attract interest from sellers. In November, bids were rumoured to be at around $315/mt FAS, but Japanese sellers did not accept such prices amid the stronger domestic market.
Today, December 9, the Kanto Tetsugen monthly export tender was closed at the average price of JPY 47,568/mt ($346/mt) FAS. The highest bid today was JPY 47,710/mt ($347/mt) FAS, while SteelOrbis has learned that 3,000 mt of scrap was bought by a South Korean mill at this level.
Following major South Korean producer Hyundai Steel’s bids for Japanese H2 scrap at JPY 43,000/mt ($310/mt) FOB on November 30, South Korean producers have been relatively absent from the import scrap market. Market sources expect import scrap prices to move up but the upward momentum is not expected to be strong due to the lack of demand and fears of a negative economic situation.
Today, December 9, the highest bid in the Kanto Tetsugen monthly export tender was JPY 47,710/mt ($347/mt) FAS or JPY 48,710/mt ($354/mt) FOB, while SteelOrbis has learned that 3,000 mt of scrap was bought by a South Korean mill at this level.
The SteelOrbis reference prices for ex-Japan H2 scrap have increased from JPY 44,600-45,500/mt ($324-331/mt) FOB to JPY 45,300-48,710/mt ($329-354/mt) FOB. The lower end of the prices represents the deals closed by Taiwan this week, while the upper end is now represented by the South Korean mill’s purchase from the Kanto tender. The dollar equivalent of prices has increased by $5/mt on the lower end and by $23/mt on the upper end with the currency fluctuations taken into consideration.
A South Korean source reports that indications for ex-US West Coast offers to South Korea are at around $400-410/mt CFR, moving sideways week on week.
After the long break they took from the import scrap segment, demand from buyers in Vietnam is recovering, pushing prices up for all segments. “Vietnamese mills have made a comeback and they are trying to secure some quantities before the long holidays,” a Vietnamese source commented. Import scrap prices are also impacted by the uptrend observed in the international scrap market, and the support coming from South Korea in terms of scrap demand.
Ex-Japan offers for H2 scrap to Vietnam have been reported at $380-385/mt CFR. Japanese H2 FAS prices are at JPY 44,000-44,500/mt ($320-324/mt) or JPY 45,000-45,500/mt ($327-331/mt) FOB.
Deals for ex-Hong Kong HMS I/II 50:50 scrap by bulk to Vietnam were closed at $370-373/mt CFR earlier this week. Offers of bulk HMS I/II 80:20 scrap cargoes from the US West Coast to Vietnam are at around $415-420/mt CFR
Although import scrap prices have moved up rapidly over the past week, some Taiwanese sources believe that prices, particularly from Japan, are now too high, while trading activity has declined. “One of them should make a move, either US sellers will increase their prices or Japanese sellers will reduce them. The $40/mt difference between ex-US and ex-Japan cargoes is huge,” a source commented.
Deals for ex-US HMS I/II 80:20 scrap in containers to Taiwan were at around $355-360/mt CFR earlier this week, then they rose to $360/mt CFR. Moreover, bookings for Japanese H1/2 50:50 scrap by bulk to Taiwan were closed at $365/mt CFR earlier this week. But towards the end of the current week, deal prices for this grade increased by $5/mt to $370/mt CFR.
In Pakistan, import scrap offers to Pakistan have continued to move up at a rapid pace due to the bullishness of global scrap suppliers, following their success in receiving higher prices in deals to Turkey. In particular, while at the beginning of the week a few deals for small tonnages of ex-UK shredded scrap were reported to have been done to Pakistan at $445-447/mt CFR, up by $10-15/mt week on week, by the middle of the week most offers reached $450-555/mt CFR, compared to $430-440/mt CFR at the end of last week. Some market sources believe that by the end of the week import offers will hardly be below $460/mt CFR, considering the recent developments in the international market. However, deals have remained occasional in Pakistan, as the curbs on the opening of letters of credit (LCs) have significantly affected production activities.
Import scrap prices in Bangladesh have continued to follow the global uptrend this week, though trade has been close to zero. In the containerized segment, offers for ex-UK shredded scrap in containers have been reported at $450-455/mt CFR, up by $10/mt week on week, while some insiders have reported offers at as high as $460/mt CFR. Besides, offers for ex-UK/EU PNS scrap in containers have been voiced at $465/mt CFR. Meanwhile, the indicative offers for ex-US HMS I/II 80:20 scrap in bulk have been reported at around $410/mt CFR, compared to $390-400/mt CFR last week. According to market insiders, no deals have been reported so far, as the opening of LCs has been still an issue, so buyers cannot book the materials, and many sellers are not interested in even offering.