The scrap buyers in the key regions have mainly been aiming for lower prices from sellers and succeeded particularly in Turkey and some Asian markets. The suppliers, however, particularly the Japanese ones, are aiming to avoid discounts and even increased their offers, despite the lower bids. The US is also expected to show some resistance, taking into account minor decreases or sideways movements in the local scrap prices depending on the region. The European collectors, however, have stepped down in their sales to Turkey, taking into account the expected slowdown in the local European market due to the upcoming holiday season.
In Turkish scrap market, the general sentiment has been rather negative this week while prices have slid. The transactions have been few, mainly because the mills are not in much of a rush to make active purchases although they still need cargoes for August. Instead, many of them preferred to watch the developments in the segments of finished steel and, more importantly, the import billet price trend. Since the workable price level for import billet from Russia and Donbass have decreased considerably over the week, many producers are not in a hurry to purchase scrap and they are expected to put more pressure on the suppliers in the next bookings. This week, two cargoes were purchases from Europe – one from the UK at $367/mt CFR for HMS I/II 80:20 and another one from Netherlands at $364/mt CFR for the same scrap grade. In addition, one of the buyers has agreed to pay $368/mt CFR for ex-Latvia scrap lot. Previously, a transaction from the US has been reported at the equivalent of $375/mt CFR for HMS I/II 80:20. As a result, the general import price for the mentioned scrap grade in Turkey has settled this week at $364-375/mt CFR for now, $5/mt down on average. Mills are mainly expected to seek discounts, considering the billet market situation. This week, local Kardemir has dropped its price by $40/mt to $525-530/mt ex-works and if the other mills are to follow, they are expected to seek scrap levels close to $350-355/mt CFR levels. In addition, the rebar prices have sunk to below $600/mt FOB/ex-works levels, adding the pressure. However, the suppliers might show certain resistance, particularly taking into account the relative stabilization of the local scrap prices in the US.
Particularly, in the US Northeast and Ohio Valley regions the local scrap prices have moved sideways, the same trend is expected in the Southeast. The sources believe that the main reason is a less than expected availability in the market while the buying from the mills has somewhat strengthened. Moreover, in August the market players largely expected a relative stabilization as well, since there are few factors in favour of the downward movement.
Despite weak sentiments and overall slowdown of demand, Japanese scrap exporters have tried to increase prices this week. In particular higher price was fixed in a higher Kanto Tetsugen export scrap tender on July 11. Scrap prices have been edging up as scrap generation has also been slower during summer months. The Kanto tender average price has been at JPY 49,740/mt ($350/mt) FAS, indicating a rise by JPY 1,573/mt, but in dollars the increase has been very small – just $4.5/mt – due to depreciation of Japanese yen. This month, only 5,500 mt of scrap has been traded in one lot versus 15,000 mt last month and 20,500 mt a month before. The current quantity has been the lowest this year. The material was supposed to be shipped to Taiwan, though some sources said that the final destination will be Vietnam.
The leading Japanese EAF steel producer Tokyo Steel has increased its local scrap purchase prices by up to JPY 1,500/mt after a long pause since the last revision on June 16. This move has been expected after higher prices have been settled in the Kanto tender, and as overall supply volume may go down in July as usually. After Kanto tender, Tokyo Steel raised its list price by JPY 500-1,500/mt depending on the mill. The highest rise has been seen for Utsunomiya plant by JPY 1,500/mt to JPY 50,000/mt delivered, which is usually the most important mill to compare with export prices. This was the first local scrap prices revision since the middle of June.
Despite the recent increases in the Japanese local and export scrap markets, S. Korean steel mills have returned to the market on Thursday with Hyundai Steel announcing lower bids for Japanese scrap, while POSCO asking for the same price as last week. Hyundai Steel has issued its new bid for Japanese H2 grade scrap at JPY 47,700/mt ($343/mt) FOB, which is JPY 500/mt below the level seen late June. Taking into consideration the recent appreciation of the Japanese yen, dollar-based prices are $4/mt lower compared to last week, but $6/mt higher than that in purchases in late June. The SteelOrbis reference price for Japanese H2 scrap has been settled at JPY 47,700-50,740/mt ($343-365/mt) FOB, slightly down from the lower end of the range due to lower Hyundai bids, while up on the higher end amid Kanto tender.
The import scrap prices in Taiwan have posted gradual declines this week as demand has been slack, taking into account slowdown in the regional rebar market. Ex-US HMS I/II (80:20) scrap offers in containers have slipped to $360-370/mt CFR this week with deals at $360/mt CFR, which is slightly below $370/mt CFR seen late last week and deals a bit earlier at $375/mt CFR. However, by the end of the week, overall quantity on offer was smaller as suppliers have been less eager to sell at lower prices. Japanese H1/2 (50:50) scrap by bulk have been offered at $375-385/mt CFR versus $383-390/mt CFR late last week. There has been information in the market that 5,500 mt of Japanese scrap sold under the recent Kanto tender will go to Taiwan with the price assessed by market sources at $382/mt CFR or so. However, today, a few market sources said that the material may be shipped to Vietnam instead, with bids from Taiwan would hardly be above $375/mt CFR.
In Bangladesh, trading activity in the import scrap market has remained limited this week amid continued issues with opening letters of credit, extremely slow end-users’ demand and buyers’ expectations of further declines. According to sources, the latest small tonnage deals for containerized PNS scrap from Malaysia have been reported at $425/mt CFR, as compared to offers for PNS scrap at $450/mt CFR last week. Meanwhile, offers for ex-UK/EU HMS I/II 80:20 scrap have been voiced at $415/mt CFR this week, with a few deals reported at abovementioned level. At the same time, offers for shredded scrap in containers have been rare this week, with the indicative offers estimated by Bangladeshi buyers at $430-440/mt CFR, down by $5-15/mt over the past week. In the bulk segment, rumours about deals for ex-US scrap in bulk are circulating in the market, but there is no official confirmation so far, while indicative offers for ex-US HMS grade scrap in bulk have been heard at $400-405/mt CFR, down by $15-20/mt week on week.
In Pakistan, import scrap prices have decreased slightly in new deals, though the sentiment about the future trend remains unclear. Accordingly, after several for ex-UK shredded scrap were signed at $415/mt CFR last week, the material changed hands at $410-412/mt CFR this week. Meanwhile, offers for shredded 211 scrap of UK and European origin in containers to Pakistan have settled at $410/mt CFR, down by $5-10/mt over the past week. Besides, apart from shredded scrap from the UK and Europe, more offers have been reported for ex-UAE HMS grade scrap at $380/mt CFR at the end of this week, versus $385/mt CFR at the beginning of the week and at $398/mt CFR last week.