While Turkey’s import scrap market has remained silent over the past week, sentiment changed in the middle of the week and is now interpreted as negative by market players. The main reason for the pessimistic mood was the lack of movement in the long steel market, with higher price levels for rebar failing to find buyers as market players wait for some real demand to materialize. Additionally, the flat steel market has been feeling downward pressure from import offers. Also, Ramadan started late this week and Turkey is getting ready for an election to be held on May 14. Turkish mills are exerting pressure on deep sea scrap quotations since they have completed their purchases for April shipments. There is still some room for them to wait before starting to buy for May shipments, though it is largely believed that they will need a lot of deep sea cargoes for this delivery period. Sellers state that several ex-US cargoes have been sold to Mexico, while European scrap has also found some alternative markets instead of Turkey. As of March 22, collection prices for HMS I/II 70:30 scrap in Amsterdam and at Belgian ports were at €365/mt, while for HMS I/II 80:20 and bonus grades in Belgium prices were at €375/mt and €380/mt respectively, all DAP. During the Turkish Steel Exporters Association’s online event again on March 22, deep sea scrap offers were estimated to be in the range of $445-450/mt CFR.
The expectations vary for the coming week. Some market players believe that Turkey has room to wait further before starting to buy scrap again. Others believe that some Turkish mills may start inquiries in the coming week. Traditionally, the first week of Ramadan is silent in terms of trading each year. With expectations not met in relation to the reconstruction of the earthquake-hit region in Turkey, rebar purchases are also slow. However, it should be remembered that, despite the postponement of finished steel demand, this is the beginning of the construction season in Turkey. Accordingly, when finished steel demand recovers, it would be safe to say that it will be here to stay during the summer. As a result, most market players think that deep sea scrap prices may indicate a downward correction and that the extent of the fall will depend on the length of the absence of the Turkish mills, but once demand is received from end-users scrap prices will bounce back.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap in CFR terms has decreased by 1.3 percent week on week. The prices are now 5.45 percent higher month on month in the deep sea segment, with prices being in the range of $450-460/mt CFR.
Last week, SteelOrbis sources throughout the US said they believed that April scrap prices would trend sideways to up $10-20/gt. This week, all sources polled say they continue to be of the same view. Sources said they believe that pricing will likely be sideways. The April buy-cycle is expected to start within approximately 10 days.
SteelOrbis has learned that the average price range for containerized HMS I/II 80:20 scrap in New York is now being heard at approximately $390-395/mt freight alongside ship (FAS), and that containerized shredded scrap in New York is now being heard at approximately $410-415/mt freight alongside ship (FAS).
SteelOrbis has learned that the current price for Mexican domestic shredded scrap is now MXN 9,700/mt ($504/mt), compared to MXN 9,750/mt ($518/mt) last week. Additionally, HMS I/II scrap prices are being heard at MXN 8,200/mt ($426/mt), compared to MXN 8,250/mt ($439/mt) last week.
Domestic scrap prices in Germany have moved up further in the month of March. The uptrend was in line with expectations, mostly driven by the positive sentiment in Turkey. Market sources admit that they had anticipated a price increase for scrap export quotations, in line with the market leader Turkey citing the Turkish government’s statements about quickly rebuilding the cities impacted by the devastating earthquakes in southeastern Turkey. Currently, the fundamentals of the local German scrap market are similar to last month. Higher interest rates in the country are taking their toll on trading, with particularly the construction sector being hit. On the other hand, a correction is expected by some players. According to the latest data provided by the BDSV, in the first 20 days of February scrap prices moved up by €20.6-30.11/mt month on month.
The increasing trend in the international scrap market has supported the local Polish scrap market and caused prices to move up significantly. However, the market is now quiet once again, one market player stated. During the past month, prices in the local Polish market for HMS I scrap have moved up to €405-410/mt DAP, from levels of €377-380/mt DAP. Prices of better grades are €10/mt higher than HMS I quotations.
The uptrend in the local Italian scrap market has halted this week. Some market players interpret the market situation as being stable, while others report a €10/mt decline on the upper end of quotations for some higher grades. Scrap supply is not on the high side, market players report, while steel plants are still interested in buying so that they can keep their inventories healthy. The Italian scrap market is still positive. It is observed that average HMS (E3) scrap prices in Italy have been at €370-390/mt delivered.
Tokyo Steel, the leading EAF-based steel producer in Japan, has announced another cut in its local scrap purchase prices by JPY 1,500/mt on the lower end and JPY 1,000/mt on the upper end. Despite the cut in quotations, Tokyo Steel’s dollar-based prices have only declined on the lower end as compared to the levels recorded on March 17 when the Japanese yen was at 132.90 to the dollar. Tokyo Steel’s general range for H2 grade scrap has moved down to JPY 52,000-54,000/mt ($399-414/mt), depending on the mill.
The Vietnamese scrap market has continued to remain silent over the past week due to the possible removal of antidumping duty on steel billet imports as of March 22 by the Ministry of Industry and Trade. The duties for import billet were standing at 11.3 percent and for bar and wire rod were at 6.4 percent until March 22, 2023. No announcement of any extension of these duties has been heard so far, which has impacted sentiments. Some Vietnamese buyers aim to achieve $455/mt CFR for Japanese shredded and $460/mt CFR for HS and shindachi scrap. No fresh prices for H2 have been available so far due to the higher gap between offers and bids. Buyers will definitely be aiming for below $445/mt CFR. A Vietnamese trader is offering ex-US containerized HMS I/II 80:20 scrap at $420/mt CFR.
South Korean producer Hyundai Steel has reduced its bids for the Japanese scrap market after a previous announcement of an increase on March 10. This week, a South Korean source reported that the mood in the country has turned sour once again. SteelOrbis has learned that Hyundai Steel has shared a bid for Japanese H2 grade scrap at JPY 52,300/mt ($401/mt) FOB. As a result, the SteelOrbis reference price for ex-Japan H2 scrap has moved from JPY 54,000-56,500/mt ($396-414/mt) FOB to JPY 52,300-54,500/mt ($401-418/mt) FOB. The lower end is now represented by Hyundai Steel’s most recent bid on March 24, with the upper end of the range represented by the Tokyo Bay prices. This week, offers for ex-US bulk HMS I/II 80:20 scrap to South Korea stand at $450-460/mt CFR, down from the indications recorded last week at $470/mt CFR.
Over the past week, Taiwan’s import scrap market has indicated a significant drop particularly in ex-US deals, while Japanese scrap prices have almost remained stable. In general, the Asian scrap market is soft with buyers taking a step back for various reasons. This week, the lowest offers for ex-US HMS I/II 80:20 scrap in containers to Taiwan are in the range of $415/mt CFR, while ex-Australia HMS has been available at $410/mt CFR. Offers for Japanese H1/2 50:50 scrap by bulk to Taiwan are slightly lower than $440/mt CFR.
Bangladeshi scrap importers have been showing minimal interest in containerized bookings this week given bank issues such as restrictions on the opening of letters of credit (LCs) in particular. Besides, offers for scrap in bulk have decreased this week, with some negotiations and even bookings reported in the market. In particular, offers for ex-US HMS grade scrap in bulk have been voiced at around $480/mt CFR, down by $10/mt over the past week. According to sources, there was a deal from the US for shredded scrap in bulk at $485-488/mt CFR and at $483/mt CFR for HMS grade scrap, though this information has not been confirmed by the time of publication. Besides, sources have reported another booking for an ex-US mixed cargo at $485/mt CFR for shredded scrap, $490/mt CFR for bonus scrap and at $475/mt for HMS grade materials. At the same time, no fresh deals for scrap in containers have been reported in Bangladesh this week, with offers for ex-UK shredded 211 scrap standing at $510/mt CFR, versus $510-515/mt CFR last week.
Import scrap prices in Pakistan have continued to weaken over the past week given worsening sentiments due to low end-user demand. In particular, offers for ex-UK shredded scrap in containers have settled at $480-485/mt CFR, down by $5-7/mt week on week. At the same time, no fresh deals have been reported so far, while most buyers expect to sign new contracts at levels below $480/mt CFR, according to sources. Notably, trade has remained in a lull due to liquidity issues, while local rebar producers have decided to revise their offer prices downwards amid extremely slow demand.