Turkish mills’ ex-Europe scrap procurement prices have remained stable this week, though it is also seen that collection prices in the EU are rising. Although these diverse trends have raised some questions, Turkish market players do not think a price increase is possible for ex-EU scrap for now.
Two European scrap exporters have increased their collection prices by €10/mt this week to €380/mt DAP. Market players believe that this move was made to secure the tonnages needed for previous commitments. “€370/mt DAP was not working and now levels around €375/mt are not attracting any tonnages either. European domestic scrap prices are not moving down,” a source in the region said. However, the situation in Turkey has not changed much. Steel demand is still sluggish. There is no hope for a recovery in the short term. Many market players believe that deep sea scrap prices seem to have hit the bottom for now. “But they are not rising either. If the energy costs of Turkish mills had increased as anticipated this month, it would have exerted some pressure on the scrap market. But the price increase has been postponed,” a Baltic scrap seller commented.
Meanwhile, some official reports give a clearer picture of the backdrop to the current situation. In the first six months this year, Turkey’s iron and steel export value was down by 51.0 percent. Also, according to a statement released by the Turkish Steel Producers’ Association (TCUD), in the January-June period this year Turkey produced 15.9 million mt of crude steel, down by 16.3 percent year on year. According to the association, the increase in local demand in the January-June period caused by the reconstruction of the earthquake-hit zone in the south of the country continues to be completely met by imports. The TCUD is now asking the government to take steps and implement safeguard measures against some countries, especially the US and the EU.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap in CFR terms has remained stable week on week. The prices are now 6.62 percent lower month on month in the deep sea segment, with prices being in the range of $346-352/mt CFR.
The US scrap trade has moved slowly this month, as sources have confirmed that, as of mid-day on Thursday, only one mill has come out with pricing. Sources have indicated that Delta has come out “sideways across the board” for all grades. And while other mills have yet to announce, some said they have heard rumors that a major US longs mill may try to take prices down for shredded and prime grade scrap. Whether that rumor has any truth to it has yet to be determined.
SteelOrbis has learned that the current price for Mexican domestic shredded scrap is now at MXN 5,150/mt ($301/mt), compared to MXN 5,750/mt ($334/mt) on July 21. Additionally, HMS I/II scrap prices are being heard at MXN 4,300/mt ($251/mt), compared to MXN 4,950/mt ($287/mt) on July 21.
As anticipated by SteelOrbis, the local Polish scrap market moved down in July. “It is all peace and quiet,” a Polish source reported. A seasonal demand lull continues in Poland, while there is only some demand coming out of Germany. “Also, Turkey’s import scrap prices are exerting pressure on prices,” the source added. Prices in the local Polish market for HMS I scrap are currently at €295/mt DAP, moving down from €322/mt DAP recorded in early July.
South Korean steel producer Hyundai Steel has announced its bids for Japanese scrap after a break of almost 15 days. The producer has increased its bids for Japanese H2 but, despite the increase in Japanese yen prices, the dollar-based prices have declined a little. Hyundai Steel has issued its new bid for Japanese H2 grade scrap at JPY 48,800/mt ($342/mt) FOB, which is JPY 1,100/mt higher than the level seen on July 13. Taking into consideration the recent fluctuation of the Japanese yen, dollar-based prices have declined by $1/mt.
As a result, the SteelOrbis reference prices for ex-Japan H2 scrap have remained stable week on week in the range of JPY 47,000-51,000/mt ($337-365/mt) FOB.
Domestic rebar sales in Taiwan have recovered this week following weeks of silence. According to a source at a Taiwanese producer, “Despite the acceleration in rebar trading observed this week, each mill has sold only limited quantities. Total rebar sales in Taiwan this week amount to around 150,000 mt.” Offers for ex-US HMS I/II (80:20) scrap in containers to Taiwan have been at $360-370/mt CFR this week. At the same time, Japanese scrap suppliers have kept their offers for H1/2 (50:50) scrap by bulk to Taiwan stable at $375-380/mt CFR.
Despite weak demand for import scrap seen early this week in South Asia, suppliers have managed to increase prices and have sold some volumes as customers have been afraid to lose the chance to buy before prices to go up further. New offers for ex-Europe/UK shredded scrap in Pakistan have been voiced at $420-425/mt CFR Qasim, up by $10-12/mt over the past week. And a few deals for this grade in containers have been reported at $417-418/mt CFR late in the week, up from the previous deal price of $413/mt CFR reported earlier. Buying in India has improved and supported the price rises. Offers for shredded in containers in India have settled at $415-420/mt CFR Pakistan, up from $410-412/mt CFR reported earlier this week and $405-410/mt CFR last week.
Following more active negotiations for bulk scrap since last week in Bangladesh, one deal for 30,000-32,000 mt of ex-US scrap has been signed with HMS I/II 80:20 scrap priced at $385/mt CFR for September shipment, similar to the levels reported last week, but down by $15/mt from the offer level two weeks back. The tradable level for shredded in bulk in Bangladesh is at $390/mt CFR. Market sources mentioned that the deal was done only on an as-per-need-basis and after a sizable discount.