Following an almost three-week silence which was passed with sporadic deep sea scrap deals, Turkey’s import scrap market has plunged with new deals from the EU. Market sources were debating if that would be the case the week started, though none of the estimated drops were this deep. Only few sources mentioned that a deep dive is coming.
When the week started Turkish mills made some inquiries and did not find a common ground with the sellers. European scrap suppliers were willing to cut their prices to Turkey but most of them were still negotiating for the $394s/mt CFR for HMS I/II 80:20 scrap. With the week proceeding, Turkish mills once again voiced their desire to wait for the next week, exerting more pressure on deep sea scrap prices. There were rumors of some major mills getting prepared to cut production rates or planning maintenance as producers’ rebar sales were underperforming.
Market sources report that exchange rate helped the drop but is not a full explanation of the recent decline in prices. Some of the scrap suppliers believe with the deals abovementioned, the market has hit bottom. Some others think that an ex-US booking would be more explanatory and indicative after these transactions. Meanwhile, most European sellers talked with SteelOrbis mentioned that they have no intention of following this drop due to their firm cost structure.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have decreased by 2.37 percent week on week. The prices are now 4.74 percent lower month on month in the deep sea segment, with prices being in the range of $386-398/mt CFR.
Scrap prices for the US domestic market trended sideways in June for all grades as scrap demand remains consistent and flows are adequate. Some buyers commented that there is an overabundance of scrap material in the market, but the steel sector’s robust activity has consumed it at a brisk pace. Contacts expect July to feature a similar trend, as part of the two to four months of stability projected in April. Yet there are market fundamentals and possible federal commercial policy implementations that could help prime grades’ prices in the summer months.
In the meantime, #1 busheling settled at $450-470/gt delivered consumer in the Midwest, with Chicago remaining at $450/gt delivered, while in Detroit mills were seen purchasing the grade in the $460-465/gt delivered range. Higher values for the grade were seen as well in Pittsburgh at $465/gt delivered and in Cleveland at $470/gt delivered. On the US East Coast, particularly in the domestic Philadelphia market, the grade remained flat at $450/gt delivered.
Containerized ferrous scrap prices on the US West Coast (USWC) continued to drop this week amid a tepid Asian import scrap market. Containerized scrap on the coast has seen a few consecutive weeks with $5/mt price contractions. As import prices into Asia and containerized ocean freight rates remain high, exporters continue to protect their margins. In Los Angeles, the price of HMS I/II 80:20 fell by $5/mt to $335/mt FAS Long Beach port, containerized P&S 5ft decreased by the same amount to $350-355/mt FAS, and containerized shredded also fell by the same margin to $355-360/mt FAS.
Prices at US East Coast docks remained unchanged this week for both bulk and containerized scrap prices. The markets remained unchanged as participants waited to see how the domestic market settled, yet they are aware that sentiment in the export market to Turkey remains bearish. In the meantime, the price of HMS I to New York and Philadelphia docks remains at $270-290/gt delivered export yard, with the higher prices reserved for deals involving large volumes, while the price of P&S 5ft was flat at $290-310/gt delivered. The price of shredder feed trended sideways at $250-260/gt delivered.
Scrap prices in Mexico were left unchanged for another week, as participants noted current stability between supply and demand. Some sellers did seek increases from mills in the Bajio region, yet the buyers were unwilling to acquiesce. Initial reports of an absolute sideways market across the board in the US contributed to the stability in the Mexican scrap market this week. Only a very limited number of buyers were seen raising their prices by MXN 100/mt in the Central region, yet other participants noted minor adjustments in light of the generalized increases implemented by other mills in recent weeks.
In the Northern region of Mexico, prices remained unchanged at MXN7,900/mt ($455/mt) delivered to consumer for #1 busheling, MXN6,000/mt ($346/mt) delivered for HMS I, MXN7,000/mt ($403/mt) delivered for P&S 5ft, MXN7,900/mt ($455/mt) delivered for shredded, and MXN5,100/mt ($294/mt) delivered for machine shop turnings (MST).
The scrap market in Germany has remained in line with the trend in other European markets this week, outlining an overall unchanged market. On the export side, meanwhile, purchase prices for HMS I/II 80:20 at export yards have remained stable at €295/mt DAP, and for the moment this level is remaining firm, although the possibility of a downward correction is not excluded.
Purchase prices in the scrap market in Italy have remained largely unchanged this week. According to sources, most scrap purchases have been concluded at unchanged prices or with slight downward corrections, while some upward adjustments have been granted for purchases of higher-quality scrap used for the production of special steel. Overall, the situation has been described as "sluggish" by most market players.
As in the other European markets, the scrap market in Poland has remained mostly stable over the past week, with a small upward adjustment in export purchase prices. In the domestic market, the main steel producers have bought regular volumes at unchanged prices compared to May. In the scrap export segment, purchase prices at export yards underwent a slight upward correction of around €3/mt for HMS I, reaching around €295/mt DAP.
After a ten-month upward rally, Japan’s Kanto scrap export tender recorded its first price decline in the June tender, though the decrease was a small one. The total tonnage of the cargo sold, which will be shipped to Bangladesh, was 20,000 mt.
In the Kanto export tender, the highest bid was at JPY 54,506/mt ($340/mt) FAS, only JPY 96/mt lower than last month. The dollar-based price moved up by $8/mt from last month’s $348/mt FAS, taking the exchange rate into account.
In the current week, the Tokyo Bay FAS-based price for H2 grade scrap remains at JPY 53,000/mt ($331mt), down by $2/mt considering the fluctuating Japanese yen-US dollar rate.
Taiwan’s import scrap market has continued its gradual decline this week with Japanese suppliers staying out of the market. Taiwanese mills are in no rush to buy scrap since their rebar sales are sluggish.
Offer prices for ex-US HMS I/II (80:20) scrap in containers to Taiwan have moved down to the range of $353-357/mt CFR from the $358-361/mt CFR levels recorded last week. Actual prices in ex-US deals have moved down by $5/mt week on week to $350/mt CFR. Following the Kanto tender, Japanese suppliers have remained out of the market, sharing no offers with Taiwan this week.
Vietnam’s demand for import scrap has remained sluggish this week as the rainy season takes its toll, while construction activity and rebar demand in the country remain slow.
Offers from the US West Coast to Vietnam for bulk HMS I/II 80:20 scrap are at $400/mt CFR, $5/mt lower on the upper end as compared to last week. According to sources, Vietnam has bought ex-Japan H2 grade scrap at $370/mt CFR, moving sideways week on week.
Pakistan’s import scrap market has weakened over the past week as buyers have continued to limit purchases ahead of the federal budget announcement. Though customers have started to return to the market, deals for scrap are possible only at discounts as mills are still cautious amid weak finished steel sales and reduced capacity utilization rates. Ex-EU/UK shredded scrap offers have been stable over the past few weeks at $420-425/mt CFR Qasim, but the tradable level has moved lower, with buyers mostly targeting $415-418/mt CFR Qasim. According to sources, ex-EU/UK shredded scrap has been sold at around $418/mt CFR Qasim this week. “Buyers are not showing interest at current offer levels and are still pushing for lower prices,” a Pakistani market insider told SteelOrbis, adding that the market may move down further. In the Pakistani domestic market, activity has remained weak, with mills continuing to limit raw material purchases to immediate requirements, amid slow finished steel sales and reduced utilization rates. Most participants are waiting for the federal budget announcement to assess its possible impact on steel prices, sales and construction activity.
In Bangladesh, import scrap activity has gradually improved this week, though overall sentiment has remained cautious and prices have continued to stay on the lower side. Fresh bookings have been heard mainly for HMS scrap, while ex-EU/UK shredded scrap has remained largely unworkable for Bangladeshi buyers due to freight and price competitiveness issues. Ex-EU/UK shredded scrap in containers have been indicated at around $405-415/mt CFR Chattogram this week, compared to offers at around $413/mt CFR Chattogram heard last week, while no fresh concluded deals for ex-EU/UK containerized scrap have been heard so far. As for ex-Australia material, 500 mt of HMS I/II 90:10 scrap from Australia/Fiji/Papua New Guinea have been sold at $390/mt CFR Chattogram, compared to ex-Australia/New Zealand HMS I/II 90:10 offers at around $405/mt CFR Chattogram heard last week. In terms of other origins, 1,000 mt of Malaysian origin HMS I/II 90:10 scrap have been sold at $390/mt CFR Chattogram, confirming that buyers’ interest remains concentrated mainly on competitively priced HMS cargoes. Meanwhile, the local Bangladeshi market has remained under pressure from weak finished steel demand, cautious mill sentiment and tight liquidity conditions.
