Turkey’s import scrap market started to move up early this week, first with ex-US scrap deals at $408-411/mt CFR. However, European scrap prices have since pushed the market up quickly, with ex-EU HMS I/II 80:20 scrap hitting $407/mt CFR. Higher scrap grades in the compositions of ex-US deals attracted attention in subsequent bookings, causing some market sources to expect another round of bookings from the US with HMS I/II 80:20 scrap in the cargoes.
Today, January 27, European scrap prices in Turkey have surged significantly in two new deals. While European scrap prices have moved up at a fast pace, market players now think that deep sea quotations will increase further in the coming week. “I think we can see $420s/mt CFR for European scrap,” a supplier commented. The surge in the EU region will also push up US suppliers’ offers. Considering the narrow range between the US and the EU in the recent deals, the first threshold for ex-US HMS I/II 80:20 scrap is now expected to be around $425/mt CFR and above. As a result, ex-Baltic scrap is estimated to be in-between. European sub-collectors report that flow to export yards is still on the low side due to the general expectation of a rise in prices. “Export yards are paying €345-350/mt DAP Amsterdam, but failing to find everything they seek,” a German sub-collector reported. A major European scrap supplier said, “While demand coming out of Turkey was not strong, we have seen how resilient scrap prices were. This was due to supply dynamics which will continue to be the main fundamental in the coming weeks. We expect prices to hit $420/mt CFR and breach that level.”
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap in CFR terms has moved up by 3.11 percent week on week. The prices are now 8.21 percent higher month on month in the deep sea segment, with prices being in the range of $410-420/mt CFR.
This week, nearly all sources polled in the local US scrap market said they believed the market will trend at strong sideways. The shift in sentiment is linked to several factors, such as the recent stability in ex-US scrap cargo sales prices to Turkey, domestic mills’ still-robust need for scrap, and this week’s winter storm warning that spans from the Central and Southern US all the way up through the Northeast.
The local Italian scrap market has remained stable week on week. Scrap collection in northern European yards is slow. Along with Italian sources, other European scrap suppliers are also saying that scrap availability is on the low side. Depending on the demand received from Turkey, this may be a key fundamental for the Italian scrap market. Meanwhile, demand for steel is not great in Italy, causing uncertainties, and preventing market players from being sure of a positive trend for scrap prices.
The local German scrap market has indicated an increase in the first month of 2023. The accelerated demand coming from European mills after their return from the holiday is the main reason for the price increase, while rising flat steel quotations have also supported prices. According to a German source, German mills were late to return to the market and so their demand was not back to full strength in January. “I believe that in February demand from EU-based producers will be higher than in January,” a sub-collector said. Scrap flow has not recovered fully in Germany due to the winter weather conditions.
While the local Polish scrap market continued its uptrend in January, market players state that the scrap flow to yards is very slow. “Everyone is trying to increase their finished steel prices but demand for rebar and flats is not high, despite the rises we observed in the raw material segment,” a Polish source reported.
Over the past month, prices in the local Polish market for HMS I scrap have moved up to €370-375/mt DAP from the levels of €345-350/mt DAP. Prices of better grades are €10/mt higher than HMS I quotations.
Although the Asian scrap market was on holiday during most of the current week, import scrap prices have continued to increase.
Some Taiwanese buyers have concluded deals for ex-US HMS I/II 80:20 scrap in containers at $408-410/mt CFR. Last week, deals for this grade were at $405/mt CFR. Deals for Japanese H1/2 50:50 scrap by bulk to Taiwan were at $430-435/mt CFR, despite the Lunar New Year Holiday. Last week, deal prices for this grade were in the range of $425-430/mt CFR.
Also, trading in Vietnam is slow due to the holiday. A Vietnamese mill closed an ex-US West Coast bulk cargo deal at $443/mt CFR, similar to suppliers’ target above $440/mt CFR last week. The latest deal price for ex-Japan H2 scrap to Vietnam was at $445-450/mt CFR, increasing by $25-30/mt over the past two weeks.