When the current week begun, it was expected to be a challenging one for sellers. Turkish mills were more inclined to wait and monitor their finished steel sales before they started to buy cargoes for April shipment. Market sources agreed that deep sea scrap prices could show a sideways trend, while Turkish producers were trying to increase their sales.
However, the market mood changed very quickly. With import scrap prices for Turkey rising in a deal, the market mood became even more positive. The uncertainties regarding US tariffs are still having an impact, though market sources report that the fundamentals of the scrap market mostly point to an upward trend. Turkey’s import scrap volume in 2024 totaled 20.04 million mt, with 4.5 million mt from the US. The EU was the leading scrap supplier to Turkey, with the US in second place. As reported by SteelOrbis, the US government officially implemented 25 percent tariffs on all imports from its two leading trading partners, Mexico and Canada, as of March 4, before postponing them once again late in the week. According to SteelOrbis’ data, the US imported 4.35 million mt of scrap in 2024, while exporting 13.02 million mt. The tariffs and planned taxes are expected to increase US-based steel producers’ needs for scrap as they will be raising their capacity utilization rates. Therefore, the available scrap volume for export may decline and/or scrap export prices may increase. “We expect prices to move up in any case. Domestic scrap prices are more attractive as compared to exports. The most recent price rises were not fully reflected in exports. Meanwhile, the volume coming out of the US has already declined,” a player from the US commented. While ex-US scrap availability is set to decline and ex-US scrap prices are on the rise, European sellers would take the opportunity to raise their offers too,” another source reported.
On March 6, market sources reported that price inquiries accelerated due to the depreciation of the euro against the US dollar. But there were hardly any offers in the market as sellers were evaluating the situation. In this context, Turkish mills were trying to fill the gaps in scrap bookings for their required delivery periods by closing deals in succession when they could find a cargo. Market sources reported that the new exchange rate means an additional $13/mt cost for European scrap sellers. There were rumors of Turkish mills receiving long steel demand from abroad, while a flat steel sale has been done by a Turkish producer to the US, with these developments supporting the optimism in Turkey.
Late on March 6, an ex-US scrap booking was done by an Izmir-based producer for HMS I/II 85:15 scrap at $376/mt CFR, with shredded scrap at $393.5/mt CFR. The cargo will be shipped in March. The HMS I/II 80:20 scrap price equivalent to this composition is believed to be $368-370/mt CFR, $1.5/mt higher on average. However, the deals from the EU and UK mentioned below support higher levels for ex-US scrap.
When Friday came, an ex-Netherlands deal was shared with the market, done by a Marmara-based producer on March 6. The HMS I/II 80:20 scrap price was at $365.5/mt CFR and shredded scrap at $388/mt CFR, with the gap between grades remaining at $22.5/mt. Another rumor indicated that ex-UK HMS I/II 80:20 scrap was bought by a Marmara-based producer at $367/mt CFR. This information was not confirmed by the buyer or the seller by the time of publication, though it is in line with expectations. SteelOrbis has revised its ex-EU scrap prices to $366-367/mt CFR, increasing them by $4.5/mt CFR. Accordingly, SteelOrbis’ reference prices for ex-Baltic and ex-US scrap have been revised up to $371-72/mt CFR and $372-373/mt CFR, respectively.
Most recent deep sea scrap bookings show that the anticipated need of higher grades in the international market is pushing premiums to widen. “It can go up to $30/mt in my opinion before the end of March,” an ex-Baltic scrap supplier commented. Having said that, the initial reports coming out of the US indicate that the sharp upward expectations for the March buy-cycle have cooled down. Instead of an increase of $35-45/mt in the local US scrap market, most now expect a more conservative rise. “Due to the more attractive prices in the local market, flow to export yards declined, causing availability in the local market to increase. This much availability made steel mills think whether it is worth raising their scrap procurement prices as much as anticipated,” a source reported. Another source said today that the flow to export yards is approximately 30 percent lower than usual.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved up by 2.71 percent week on week. The prices are now 5.87 percent higher month on month in the deep sea segment, with prices being in the range of $366-373/mt CFR.
As anticipated in last week's report, rumors of possible price increases in the local scrap market in Italy have intensified in recent days. Although spot prices have not changed week on week and negotiations for monthly contracts are still ongoing, it is widely believed that prices for all qualities will increase by €5/mt to €15/mt starting next week. The key factors for market operators have not changed - scrap availability is still on the low side and producers struggle to raise the prices of finished steel. The demand for finished products - although still decent in the local market and low in foreign markets - is not lively.
In Spain, scrap purchase prices of steel mills in the local market have increased by around €10-20/mt depending on the mill, and demand for scrap appears to be on the rise.
The local Polish scrap market has remained stable week on week, but just like in other European countries, there is already talk about possible rises in scrap prices. On Monday, March 10, mills should publish their new scrap purchase prices for March contracts and the expectations are uncertain. On the one hand, scrap sellers in the local market would like to see mills accepting prices €10-15/mt higher, but on the other hand, producers are not in a position to accept such requests. At the moment, local sales prices from Polish traders are standing in the range of €310-315/mt for HMS I, around €290/mt for HMS II and around €320/mt for bonus grades. All prices are delivered to mill. Scrap demand is low in the local market, and it has also declined from the exports markets. Local collection prices to export yards have remained stable week on week in the range of €310-320/mt DAP for HMS I/II 80:20 scrap.
The German scrap market has remained silent this week. Most players in the local market have remained in wait-and-see mode due to currency issues, while collection prices for export yards have been stable week on week in the range of €305-310/mt DAP for HMS I/II 80:20 scrap.
South Korean steel producer SeAH Besteel has shared bids for Japanese shredded scrap. Market sources report that this grade is not widely available in the local South Korean market, and hence it is logical for the producer to seek it from Japan. As SteelOrbis previously reported, South Korean steelmaker Hyundai Steel has halted production at its Dangjin plant due to a workers’ strike. Market sources report that POSCO has also been facing low product demand.
SeAH Besteel has shared bids for Japanese shredded grade scrap at JPY 47,000/mt ($318/mt) CFR. Considering the gap between ex-Japan shredded and H2 scrap prices at around JPY 3,000-4,000/mt, this means indications for ex-Japan H2 prices for South Korea are at JPY 40,000-41,000/mt FOB or $271-278/mt FOB.
Over the past week, Taiwan’s import scrap prices have followed the upward trend of the international scrap market. This week, domestic rebar sales in Taiwan have been silent once more since Taiwanese producers concluded some deals last week, but the positive sentiment surrounding the scrap segment has not changed.
Offers for ex-US HMS I/II (80:20) scrap in containers to Taiwan have moved up this week from $315/mt CFR to $319-325/mt CFR. The number of offers shared for Japanese H1/2 (50:50) scrap in bulk have increased this week, from almost zero in the previous week.
Vietnam’s import scrap prices have maintained their strength over the past week as a result of international scrap prices moving up during the week. Market sources report that freight between Japan and Vietnam has declined and has provided some margins to Japanese sellers who have kept their offers stable over the past week.
Over the past week, offers for Japanese H2 scrap to Vietnam have remained stable at $325-330/mt CFR. Ex-US bulk HMS I/II 80:20 scrap offers to Vietnam have moved up by $5/mt on the upper end to $360-370/mt CFR. Market sources report that Vietnam has bought an ex-Australia cargo at $345-350/mt CFR.