While Turkey’s import scrap market made a positive start to the current week, the uptrend has lost its momentum in subsequent days. Expectations of deep sea scrap prices moving closer to $360/mt CFR have disappeared over the week.
Two ex-Netherlands scrap deals have been closed at around $346-347/mt CFR, after the ex-Germany booking signed at $349.5/mt CFR. Although the ex-Netherland deals showed a decline in the premium scrap price, most market players did not see this as a reversal of the market trend since the cargoes from the Netherlands are considered to be of lower quality. These deals had no negative impact on market sentiments, but on the contrary many players believed they were evidence that the recent higher levels have now settled into a stable trend. “With these consecutive bookings, it is now clear that the recent price increase is not temporary,” one source told SteelOrbis, with other agreeing with this sentiment.
However, the depreciation of the euro is once again raising questions. Following FED’s decision to cut its interest rates by 25 base points, adding that they are only planning two cuts in rates in 2025, euro depreciated to 1.03 against the US dollar today, December 20. This rate was last seen on November 2022. The depreciation of the euro gives European scrap suppliers room to reduce their offers to Turkey. It is almost the end of 2024 and holiday season in the scrap supplier regions are approaching fast. However, the expectation of an ex-US scrap cargo above $355/mt CFR is now questioned. With the most recent deals closed from the EU taken into account and due to the recent developments in the euro-dollar exchange rate, SteelOrbis will revise its ex-US scrap prices to $353/mt CFR, dropping them by $2/mt from the previous estimated levels in the lack of a confirmed deal.
Another note for the upcoming year has come from President-Elect Donald Trump, who advised Europe to reduce the trade deficit with the US. Trump previously said that US will impose 25 percent tariff against Canadian and Mexican goods and services when he takes the office.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved up by 1.16 percent week on week. The prices are now 1.01 percent higher month on month in the deep sea segment, with prices being in the range of $347-353/mt CFR.
Domestic US scrap prices are now discussed as being mixed for next month, with some market insiders calling scrap values sideways to soft-sideways compared to December, little changed from a week ago, while others call it sideways to higher amid expectations for better demand from mills in the new month, scrap insiders told SteelOrbis this week.
An insider said that an improvement in finished steel demand is unlikely until later in the first quarter of 2025. “My sense right now is that we’ll see the markets soft-sideways for January. November and December were (bad) months, and things don’t seem very promising until later on in Q1.”
“I would speculate that we’ll see stronger seasonal demand coming from the mills next month as there are more melt days in January than were available in December,” another source said.
SteelOrbis has learned that the current price for Mexican domestic shredded scrap has remained unchanged over the past week at MXN 6,150/mt ($295/mt). Additionally, HMS I/II scrap prices have declined by MXN 100/mt ($5/mt) to MXN 4,450/mt ($213/mt) over the same period.
Local scrap prices in Italy have undergone further downward corrections in the past week even though trading activity has been very slow as the Christmas break approaches. “The purchase prices of steel mills have dropped a few more euros because producers do not need to buy or want to take advantage of the last deliveries”, commented one market participant.
Sources have very different opinions on the forecast for January: the intention of steel mills remains to lower prices further since with the new year their scrap yards will be full and production low, while some traders expect a recovery.
The leading Japanese EAF steel producer Tokyo Steel has announced its new prices for its domestic scrap purchases, announcing cuts for two regions, Tahara and Utsunomiya, by JPY 500/mt both for H2 scrap and shindachi grades. Despite the cuts announced for Tahara and Utsunomiya plants, Tokyo Steel’s general range for H2 grade scrap remains stable at JPY 40,000-41,500/mt ($255-264/mt) depending on the mill. Due to the depreciation of the Japanese yen against the US dollar, the dollar-based prices have moved down by $8-9/mt since December 11.
South Korean steel producer POSCO has kept its bids for Japanese scrap stable since November 29. A source at a major South Korean producer stated, “POSCO will keep their prices stable and continue to bid for Japanese scrap due to the low stocks on hand. We hear that one of their facilities, which produces hot metal, has problems and they have cut their HMR (hot metal ratio) and are consuming more scrap.” POSCO has shared bids for Japanese HS grade scrap at JPY 50,000/mt ($319/mt) CFR, stable week on week.
POSCO has also shared bids for Japanese shredded scrap, which have remained stable at JPY 48,000/mt ($306/mt) CFR. Considering the gap between ex-Japan shredded and H2 scrap prices at around JPY 3,000-4,000/mt, this means indications for ex-Japan H2 prices for South Korea are at JPY 41,000-42,000/mt FOB or $262-268/mt FOB.
Taiwan’s import scrap market has continued to soften this week, with offers from Japan in particular moving down. US-based suppliers are getting ready for the holidays and there have been hardly any ex-US offers shared with Taiwan this week. The negative impact of Russian billet persists. This week, offers for ex-US HMS I/II (80:20) scrap in containers have disappeared in Taiwan. “Taiwan’s scrap procurement is on the low side, and the Christmas holidays start this week. Therefore, US-based suppliers have stopped offering,” a source reported. Similar to last week, offers from Japan to Taiwan are few. The offers shared for Japanese H1/2 (50:50) scrap bulk have declined to $315-320/mt CFR from last week’s $320-323/mt CFR.
Vietnam’s import scrap market has lost the slight strength it gained last week amid the lack of steel demand in the country. As Vietnamese mills are reducing their production utilization capacities, their need for scrap is also declining. Offers for Japanese H2 scrap to Vietnam have decreased over the past week from $335/mt CFR to $330-335/mt CFR. Ex-US bulk HMS I/II 80:20 scrap offer prices have declined by $10/mt over the past week to $350/mt CFR.