Russia’s invasion of Ukraine has continued to drive the upward movement of steel and raw material prices over the past week. Turkish mills have been trying to compensate for canceled billet and slab orders and have also been seeking to meet the demand they are receiving from other countries. Although Turkish mills have been trying to take a break from deep sea scrap purchases toward the end of this week, but this break is expected to be short-lived. Sellers are confident that scrap prices will continue to increase as they are facing similar problems on the collection side. The benchmark HMS I/II 80:20 scrap prices on CFR basis has recorded a 4.18 percent rise week on week, lower than the rise recorded last week (approx. 22 percent). The month-on-month increase is 30.09 percent in the deep sea segment, with prices in the range of $640-655/mt CFR.
Russia’s invasion of Ukraine has turned the international markets on their heads, sources tell SteelOrbis, adding that the spikes in this month’s US scrap pricing are similar to 2008, when US busheling prices climbed to roughly $1,000/gt. And while HMS, P&S, and shredded scrap prices settled up by $125/gt “across the board” this month, busheling scrap prices surged even higher.
Both local and export demand for Japanese scrap is strong, and, with the absence of Russia, “Both Japan and South Korea’s scrap prices will move up further. Hyundai and POSCO will need more Japanese scrap and this will affect the Japanese market,” a source commented. Under the current circumstances, the ex-Japan Kanto scrap tender indicated a significant price increase on March 9. A total of 10,000 mt of H2 scrap was sold at JPY 63,510/mt ($548/mt) FAS in the latest Kanto tender. In the Kanto tender held on February 2, the highest bid for this grade was at JPY 55,850/mt FAS. Accordingly, the price rise between two Kanto tenders is JPY 7,660/mt or $66/mt over the month, while it is also observed that, as compared to the Kansai tender, the H2 export price from Japan has increased by JPY 4,930/mt ($43/mt).
After the Kanto tender, the main EAF-based steel producer in Japan, Tokyo Steel, decided to increase its scrap procurement prices by JPY 3,000/mt ($26/mt) effective from March 10. Tokyo Steel’s new price levels for H2 scrap are now in the range of JPY 58,000-60,000/mt ($501-518/mt), while for shindachi scrap they are at JPY 60,500-64,000/mt ($523-553/mt)
Over the past week, South Korean mills have been increasing their domestic scrap procurement prices, while they were relatively quiet on the import scrap side, waiting for the result of South Korea’s presidential election. With the rises recorded in the Japanese Kanto tender on March 9, and local Japanese scrap prices moving up accordingly, South Korean mills have been forced to raise their bids for Japanese H2 scrap to be able to buy more scrap. Compared to the levels announced on February 25, Hyundai Steel decreased its bid for H2 grade by JPY 500/mt ($4.3/mt) to JPY 56,500/mt ($489/mt) FOB. Domestic H2 grade scrap prices in Japan were in the range of JPY 56,000-57,000/mt ($485-493/mt) FAS Tokyo Bay on March 3 , which equals JPY 57,000-58,000/mt ($493-502/mt) FOB. As a result, the SteelOrbis reference price for ex-Japan H2 scrap is now at JPY 56,500-59,000/mt ($489-511/mt) FOB. Also, offers from the US West Coast to South Korea for bulk HMS I/II 80:20 scrap are at around $680-690/mt CFR and are considered too expensive to be acceptable.
Import scrap prices in Vietnam have surged up at a significant rate over the past week. While ex-US scrap offers to Vietnam are considered unacceptable, the focus of buyers has once again shifted to alternative sources such as containerized scrap. Additionally, the strong demand observed in the Japanese domestic market and in South Korea have led to a price increase in Japanese offers to Vietnam. As of March 10, offers for ex-US HMS I/II 80:20 to Vietnam were at $690-700/mt CFR, with a huge surge of $100-110/mt week on week. Offers from Japan to Vietnam for H2 grades are currently at around $630-640/mt CFR, indicating a $60-70/mt increase week on week.
Taiwanese mills’ import scrap purchase prices have indicated significant rises over the past week, as the impact of Russia’s invasion of Ukraine continues to be felt. According to a SteelOrbis contact, pig iron offer prices from India to Taiwan have reached $845/mt CFR, while last week the price was at $700/mt CFR. The tradable billet prices in the country are now at $800/mt CFR. Although there were deals for ex-US HMS I/II 80:20 scrap in containers in Taiwan that were closed below $550/mt CFR this week, as of March 11 market players thought the workable levels for this grade were at $550/mt and above. Japanese H1/2 50:50 scrap by bulk has been offered to Taiwan at $615-630/mt CFR, which means a $25-40/mt increase in offers week on week, even higher as compared to the deals concluded at $540/mt CFR in the middle of last week. SteelOrbis has learned that Japanese shindachi scrap offers are now in the range of $650-685/mt CFR Taiwan, compared to deals recorded last week at $610-620/mt CFR.
Pakistani scrap buyers have been forced to accept higher prices this week. In particular, after shredded 211 scrap of UK and European origin was sold at the beginning of this week at $615/mt CFR, new deals for around 5,500/mt in total have been reported at $620-625/mt CFR. Besides, by Thursday, March 10, several deals were voiced at $630-632/mt CFR, according to sources. Meanwhile, new offers are standing at $640-645/mt CFR, up by $20-25/mt since Monday, March 7.
Bangladesh scrap importers have been active in negotiations, having concerns that prices may move up further. Overall, by the end of this week prices for bulk scrap are around $100/mt higher than levels in offers at the beginning of this week. A mixed ex-US bulk cargo including around 32,000 mt of HMS I/II 80:20, shredded 211 and bonus scrap has been booked by Bangladeshi mills at $700/mt CFR this week, up by $100/mt since the beginning of this week. Meanwhile, in the containerized scrap segment, market sources reported higher prices in new deals along with a shortage of containers in Bangladesh. Offers for ex-Brazil PNS scrap have been heard at $635/mt CFR, and ex-UK shredded 211 scrap offers at around $660/mt CFR. However, some market insiders believe ex-UK offers may increase to $700/mt CFR in the short run.