Following the lower price levels recorded earlier this week in scrap suppliers’ offers to Turkey to $350s/mt CFR for ex-EU HMS I/II 80:20 scrap and $360s/mt CFR for ex-US cargoes, deep sea scrap prices have dropped sharply.
As of today, a sharp decline in prices is confirmed and market players have diverse ideas on how the future trend will be. SteelOrbis hears that the collection prices of European scrap exporters stand in the range of €275-290/mt CFR, depending on the grade. However, the flow to export yards is still slow. Meanwhile, a major US scrap supplier said that HMS I/II 80:20 scrap flow to US-based export yards is normal, approximately %15-20 percent of a slowdown is observed for shredded scrap flow. The same supplier said that “Turkey will buy another 15 deep sea cargoes minimum, and there is enough availability to cover that on the suppliers’ side. I do not think there is a big room for further decline, but it is not possible to say whether this is the bottom or not.” Another ex-EU and ex-US scrap supplier reports demand received from Turkish mills is also on the low side, adding “Under the current circumstances, I do not expect mills to start a rapid search for high number of cargoes. Hence, an upward correction in prices is unlikely. But price can move in a very narrow range while producers conclude their purchases for November. This can be the bottom.”
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved down by 3.98 percent week on week. The prices are now 6.42 percent lower month on month in the deep sea segment, with prices being in the range of $345-355/mt CFR.
Multiple sources have indicated that they believe November scrap prices in the US are poised to stay sideways. One source said that the number of mills coming back from scheduled maintenance works coupled with the fast-approaching winter months has him thinking that the markets are fairly stable. Others largely agreed, with a second source adding that, while based on today’s snapshot of the market, he could see scrap trending sideways in November. On the other hand, if the UAW strike is settled by the start of the next buy-cycle, he believes that prices are likely to firm up.
SteelOrbis has learned that the current price for Mexican domestic shredded scrap is now at MXN 7,950/mt ($430/mt), compared to MXN 7,250/mt ($388/mt) a week ago. Additionally, HMS I/II scrap prices are being heard at MXN 6,600/mt ($357/mt), compared to MXN 6,050/mt ($324/mt) last week.
Domestic scrap prices in Italy have remained stable over the past two weeks. The lack of finished steel demand in the country is preventing any softening, while demand and prices are on the low side. “Scrap flow to yards or scrap demand received from steel plants has decreased,” one Italian source said.
The Taiwanese rebar market has been silent over the past week, as players have reacted to the decreasing trend of the international scrap market by cutting their rebar prices. Offers for ex-US HMS I/II (80:20) scrap in containers to Taiwan have continued their downtrend from $367-375/mt CFR to $360-365/mt CFR. Japanese scrap suppliers are sharing offers for H1/2 (50:50) scrap by bulk to Taiwan at $367-373/mt CFR.
South Korean and Vietnamese mills’ import scrap prices have declined in line with the negative sentiment in the international scrap market.
South Korean steelmaker POSCO has shared bids for Japanese HS scrap at JPY 57,500/mt ($383/mt) CFR. SteelOrbis also heard that Japanese H2 scrap offers to Vietnam are at $370-375/mt CFR.
SteelOrbis’ reference price for ex-Japan H2 scrap has moved down by JPY 2,000/mt on the lower end and by JPY 500/mt on the upper end this week to JPY 49,000-52,000/mt ($325-345/mt) FOB.
In Bangladesh, sources have reported only a few occasional deals for containerized scrap, though a few sizable lots are reported to have been bought in bulk. Specifically, a deal for 32,000 mt of ex-Australia HMS grade scrap was reported at $405/mt CFR last week, while another deal also for 32,000 mt of ex-US HMS grade scrap is reported to have been signed at $395/mt CFR. Offers for ex-US HMS I/II 80:20 scrap have been estimated at $395-400/mt CFR, down by $20-25/mt week on week, and at around $415/mt CFR for shredded 211 scrap, versus $425/mt CFR last week. Meanwhile, offers for ex-EU shredded scrap in containers have been heard at $414-420/mt CFR, down by $10/mt over the past week, while offers for HMS I/II 80:20 scrap have settled at $400/mt CFR, against $420/mt CFR last week.
In Pakistan, import offers for ex-UK/EU shredded scrap in containers to Pakistan have fallen to $405-410/mt CFR, compared to $410-415/mt CFR last week, while most bids have been voiced at $400-405/mt CFR levels. Some deals have been heard at $404/mt CFR, but most Pakistani buyers are not in a rush to sign new deals. At the same time, according to sources, the Pakistani steel sector is in deep trouble due to a lack of demand and the burden of expenses, while most steel mills are closed and 20 percent are operating on 40 percent capacity.