Following the silence during the Feast of Sacrifice holiday, Turkey’s import scrap market has moved down in two deals from the US and the EU. However, Turkey’s ex-EU scrap procurement prices subsequently recovered in a newer deal.
In general Turkey’s import scrap market is very pessimistic. The lack of finished steel exports and low volumes of steel changing hand in the local market is becoming hard for Turkish producers. Many mills stated that financial struggles are getting deeper with each day. Meanwhile, a source from a producer said, “We need to be very cautious to maintain our cash flow and financial stability. If thing continue like this, another cut in production rates or even stoppages are unavoidable.” Another contact from another producer said, “Since our nearest competition offers steel to our markets with a $30/mt lower price, exports should not be expected to recover.” On the other hand, a major EU-based scrap supplier is not pessimists at all. According to this source, “Europe provides the two third of the scrap Turkey is buying. Therefore, considering the supply deficit being more than the demand congestion, European scrap prices will maintain their firm stance.” Also, some alternative markets in the Indian sub-continent are seeking for cargoes, SteelOrbis understands.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap in CFR terms has decreased by 0.66 percent week on week. The prices are now 3.09 percent lower month on month in the deep sea segment, with prices being in the range of $375-378/mt CFR.
Although many believed that the July 4 holiday in the US would push the start of July’s scrap trade to next week, SteelOrbis has learned that Delta Steel has come out at down $30/gt on busheling, down $20/gt on frag, and sideways on P&S scrap.
These levels are in alignment with what market sources expected a week ago.
SteelOrbis has learned that the current price for Mexican domestic shredded scrap is now at MXN 7,100/mt ($404/mt), compared to MXN 7,600/mt ($431/mt) on June 16.
Additionally, HMS I/II scrap prices are being heard at MXN 6,100/mt ($347/mt), compared to MXN 6,100/mt ($346/mt) on June 16.
Over the past two weeks, domestic prices in Italy for some scrap grades have increased on the upper end, while prices of other grades have remained stable as anticipated. SteelOrbis hears that the local Italian scrap market is weak, with general expectations being for a sideways movement of prices. Several sources said that Italian producers will stop production in late July-early August for the summer holidays.
Despite the expectations of a more stable trend in June, domestic scrap prices in Germany generally moved down during the month. Amid the slower demand coming from European scrap buyers along with the lower price levels recorded in Turkey, German scrap sellers decided it was time to sell some of their stocks ahead of the holiday season in order to make a profit.
Domestic scrap prices in Poland have moved down in line with the international trend. The lack of steel demand has been the main reason for Polish producers’ reluctance to pay higher price levels for raw materials. Also, scrap procurement prices in alternative markets such as Germany or Turkey have also been moving down, not helping the situation.
While there are rumors of new deep sea scrap deals done by Vietnam, market sources report that the financial and real estate-related crises have continued in the country. Offers for ex-Japan H2 grade scrap to Vietnam have increased by $5/mt to $385-390/mt CFR over the past two weeks. Also, a Vietnamese buyer concluded a deal for shredded scrap from Japan at $415/mt CFR.
As of July 5, Tokyo Bay FAS-based prices for H2 grade scrap were still at JPY 48,500-49,500/mt ($336-343/mt). Due to the ongoing depreciation of the Japanese yen against the US dollar, dollar-based prices have moved down by $3/mt since June 23. This level signals JPY 49,500-50,500/mt ($343-349/mt) FOB for this grade.
Domestic rebar sales in Taiwan have remained limited this week, while market confidence has diminished because of weakened scrap prices. As the Chinese market is fragile and import scrap prices are not firm, finished steel trading in Taiwan remains on the low side. Ex-US HMS I/II (80:20) scrap in containers were bought at $375/mt CFR Taiwan earlier this week and declined to $370/mt CFR yesterday, July 6. At the same time, Japanese scrap suppliers cut their offers for H1/2 (50:50) scrap by bulk to Taiwan from $385/mt CFR earlier this week to $380/mt CFR yesterday, June 6.
In Bangladesh, only occasional deals for containerized scrap have been reported in the market at lower prices, while business activity in the bulk segment has been close to zero.
More specifically, in Bangladesh, offers for ex-UK and Australia shredded scrap in containers have been voiced at $445/mt CFR, down by$10/mt week on week. Meanwhile, offers for HMS I/II 80:20 scrap have been reported at $415/mt CFR, down by $5-10/mt week on week, with several deals reported to have been signed for ex-Australia and New Zealand materials at the abovementioned level. Another deal for HMS 1 grade scrap ex-Dubai has been reported at $428/mt CFR. Furthermore, offers for ex-Malaysia and ex-Singapore PNS scrap have been reported in Bangladesh at $450/mt CFR, down by $15/mt over the past week.
In Pakistan, most scrap importers have not returned to work so far after the holiday. However, a sharp fall has been reported in import scrap prices as seen in the occasional deals done. More specifically, offers for ex-UK/EU shredded 211 scrap in containers have been voiced at $413-420/mt CFR, versus $435/mt CFR two weeks ago. Besides, according to sources, several deals for around 1,000 mt in total of ex-UK/EU materials have been signed at $416-418/mt CFR this week, as compared to the deal price at $432/mt CFR two weeks ago. Meanwhile, new offers for ex-UAE HMS grade scrap have dropped to $398/mt CFR.