Deep sea scrap prices maintain their strength in Turkey, two new deals signal that suppliers are not bending to buyers’ desires to lower prices a bit. The current week started with a silence in contrary to the initial expectations, there was no new deal closed during the SteelOrbis & IREPAS conference held in Monaco during October 9-11. SteelOrbis hears that alternative markets such as India are still active in their scrap inquiries. A supplier said that “Turkish mills are once again reluctant to pay the current levels, hence material seems to set going to India, Pakistan and Bangladesh or such alternative markets.” It is observed that local Turkish rebar market is failing to maintain its official prices, mills are selling rebar at lower-than-their-list-prices. It was also observed in the IREPAS conference that one of the main topics were the energy prices. Turkey is expecting another price raise for electricity in the coming weeks, hence mills are trying to gain ground as they are getting ready for the announcement.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap in CFR terms has recorded a 0.34 percent decrease week on week. The month-on-month prices are now 5.44 percent higher in the deep sea segment, with prices being in the range of $363-373/mt CFR.
US domestic scrap prices finished settling for October earlier this week, and sources say the forecast for November is mixed due to the range of factors that could potentially impact the trend.
Many in the market are expecting a sideways trend next month after prices dropped this month, but some say that if export offer prices don’t firm up, it might be an indication that domestic prices have not yet hit bottom.
While many deals have been postponed to the next week due to the uncertainties on both buyers and sellers end, local Italian scrap market has slightly increased by €20-30/mt on the lower end.
“Collection prices at €330/mt delivered in some export yards are too high in my opinion, this price can only be paid for super materials such as P&S which usually is in the bunch to make a beautiful cargo and a better average price. Also, a good quality can be found by export yards at €310-315/mt delivered,” a seller commented. Regarding the €330/mt delivered prices in the European export yards, some sources report that this material is bought for the short sales.
Despite the surprise price increase recorded in September in Japan’s Kanto scrap export tender, it is observed that the prices in the tender have once again decreased in October and continued their downtrend which had started in April of the current year. The latest downward revision in the Kanto tender was expected by SteelOrbis since the general trend of the Asian market has been downward through the past month.
On October 12, the Kanto Tetsugen monthly export tender has been closed at the average price of JPY 49,865/mt ($340/mt) FAS, which is down by JPY 1,175/mt or $15/mt from September, taking into account exchange rate fluctuations. This price corresponds to JPY 50,865/mt ($347/mt) on FOB basis. SteelOrbis hears that 5,000 mt of scrap changed hands at JPY 50,120/mt ($342/mt) FAS, while another 5,000 mt was sold at JPY 49,610/mt ($338/mt) FAS.
Vietnamese steel market has been quieter this week, performance is reduced as the major steelmaker in Vietnam, Hoa Phat has announced that it will reduce its steel prices with two separate steps. According to a source, “Vietnamese mills have to cut their production, hence they do not need to import scrap at high levels.” However, Vietnamese mills’ bids are significantly lower than this range at $370/mt CFR.
The range of Japanese H2 offers to Vietnam narrowed to $390-395/mt CFR from the $385-400/mt CFR recorded last week.
During the past week, Tokyo Bay FAS based prices have increased by JPY 1,000/mt on the lower end to JPY 48,000-49,000/mt ($325-332/mt) for H2 grade scrap, and are signaling for a JPY 49,000-50,000/mt ($332-339/mt) FOB for this grade.
Therefore, the SteelOrbis reference price for ex-Japan H2 scrap has moved up by JPY 2,000/mt on the lower end over the week to JPY 49,000-51,000/mt ($339-349/mt) FOB. The lower end of the range represents offers to Vietnam and Tokyo Bay FAS prices, while the upper end has already been revised in line with Kanto tender.
An ex-Hong Kong cargo for HMS I/II 50:50 scrap by bulk to Vietnam was offered at $380/mt CFR this week, $5/mt lower than the levels recorded on September 29. This week, offers of bulk HMS I/II 80:20 scrap cargoes from the US West Coast to Vietnam are at around $405-410/mt CFR.
Due to the slowing scrap generation in Taiwan against the backdrop of fragile economy, market players state that both domestic and import scrap quotations in the country have moved up a bit over the past week. “We are talking about the deals done, not offers. But situation is similar for all Asian countries,” a source reported, adding that “The whole scene is shrinking, it is not just scrap but also steel.
Deal prices for ex-US HMS I/II 80:20 scrap in containers to Taiwan have been at $360/mt CFR, offer levels recorded last week were at $365/mt CFR. However, a source in a major Taiwanese mill commented about the price and said in comparison to the most recent deals at $350-355s/mt CFR, it is signaling a price increase.
Taiwanese sources state that deals for Japanese H1/2 50:50 scrap by bulk to Taiwan were closed at around $375/mt CFR, last week’s deal prices were in the range of $365-370/mt CFR and slightly above.
Meanwhile, South Korean scrap market is very quiet this week. The local scrap procurement of mills increased this week. According to a source, “There was a price rise but afterwards flow came back up to around 90 percent.” SteelOrbis understands that local suppliers are selling some of their scrap due to their concerns that sentiment may change. But the recovery in the domestic scrap flow can also come to a halt and South Korean scrap suppliers do not have much scrap in their yards. South Korean producers have scheduled maintenances and also Hyundai’s ongoing strike causes demand for scrap to remain relatively low. For the current week, it is safe to say that major South Korean producers were out of the import scrap market.
In Pakistan, prices for import scrap have decreased slightly in new deals this week. At the same time, inquiries for import scrap from Pakistani customers have been increasing over the past week given the necessity to replenish low stocks, coupled with the further appreciation of the Pakistani rupee against the US dollar. Thus, after a few deals for ex-UK shredded scrap were signed at $455/mt CFR last week, the material changed hands at $450/mt CFR this week. Offers for shredded 211 scrap of UK and European origin in containers to Pakistan have settled at $450-455/mt CFR, down $5/mt week on week. Meanwhile, apart from deals for containerized scrap, market insiders have reported negotiations for scrap in bulk.
In Bangladesh, scrap importers have been active in negotiations, having concerns that prices may move up further. In particular, following several bookings for scrap in bulk last week, another ex-US mixed cargo for 31,000/mt of HMS grade and 4,000/mt of bonus scrap have been reportedly sold at $415/mt CFR on average. The average booking value corresponds to the levels of the previous deals done last week, however, this week, market insiders have been estimating new offers at around $430/mt CFR. Meanwhile, in the containerized scrap segment, a deal for 5,000/mt of ex-UK/EU origin PNS scrap has been reported at $492/mt CFR, up by around $20/mt week on week. Besides, another deal for 1,000/mt of PNS scrap has been signed at $495/mt CFR. Meanwhile, offers for ex-UK/EU shredded 211 scrap have been voiced at $480/mt CFR, up by $10/mt week on week, with a few deals reported at this level.
