At the beginning of the current week, five new scrap deals in Turkey were disclosed to the market, most done on Friday, January 5, pushing prices further up. On the first working day of the week, the mood in Turkey changed a little. Several sources reported that the expectations for a fall in the local US scrap market changed their own expectations and they had come to believe that the upward movement of scrap prices could be limited. In mid-week, Turkey accepted higher price levels for deep sea scrap, amid the slow flow of scrap to export yards, winter conditions disrupting collection activities, and the demand coming from Turkey. SteelOrbis reported yesterday, January 11, that Turkey’s deep sea scrap prices could stabilize in the coming deals for scrap cargoes. A total of 23-24 deals for February shipment have been signed, with an estimated further six to nine deals needed to be done for shipment in February. However, several market sources confirmed that postponements have been sought for ex-Baltic cargoes due to the difficult winter conditions. The postponements from the Baltic region may increase interest in short sea scrap in the coming period. For now, the current situation is not expected to create huge gaps in Turkish producers’ future inventory levels.
Also, an ex-Belgium deal was done on January 11 by a Marmara-based producer for HMS I/II 80:20 scrap at $418/mt CFR, with shredded and bonus grades at $443/mt CFR, for February shipment. This level is $4.5/mt lower than the previous average price fixed in ex-EU scrap bookings. The price difference between shredded and HMS I/II 80:20 scrap was again $25/mt.
The stabilization of deep sea scrap prices seems to be gaining pace. There are enough offers in the market to provide the needed cargoes in Turkey, for February shipment. Local Turkey rebar demand is also still stagnant and provides little support for higher scrap prices. “Next week prices may remain stable, at least this is our expectation,” a supplier of ex-US and ex-EU scrap commented. Another supplier said, “There is room for a decline of around $10/mt since the number of offers in the market is increasing.” Pressure is clearly building on deep sea scrap quotations. Hence, SteelOrbis has revised its deep sea scrap quotations to the lowest levels recorded in the market this week.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms for Turkey have moved up by 1.2 percent week on week. The prices are now 0.71 percent lower month on month in the deep sea segment, with prices being in the range of $418-425/mt CFR.
Scrap prices in the US Northeast have settled at mostly sideways this month, as sellers in that region largely resisted mills’ attempts to take prices down. However, prices in other parts of the US have not been as stable. Scrap prices in the US officially settled on January 11, sources note, adding that prices landed “a little bit of everywhere depending on the mill and the seller.” For example, whereas some sellers had success in negotiating prices at sideways for certain grades, others sold at levels below December settled prices.
SteelOrbis has learned that the current price for Mexican domestic shredded scrap is still at MXN 8,900/mt ($515/mt), unchanged in pesos in the past week. Additionally, HMS I/II scrap prices are now being heard at MXN 7,750/mt ($443/mt), compared to MXN 7,759/mt ($449/mt) a week ago.
After returning from the winter holidays, the local Italian scrap market has remained largely unchanged in terms of prices compared to December, with only a few increases reported in the range of €5-10/mt, while market participants are waiting for developments in the finished steel segment. Currently, scrap availability has improved compared to December as scrap warehouses were working over the holidays and stocking up. However, once these stocks are exhausted, "Supply will become tight once more," according to a market participant. Accordingly, sources expect the market to rise further in the short and medium terms due to the inevitable gap between supply and demand. Another determining factor are the logistical challenges that characterize the winter months, with transport costs likely to increase sharply due to rising water levels in the rivers in Germany.
Taiwan’s import scrap prices have moved up slightly over the past week, while Taiwan is back in the market for Japanese scrap. A producer booked deals for this grade at $375/mt CFR, while others have closed deals at $378-380/mt CFR. Japanese scrap suppliers are sharing offers for H1/2 (50:50) scrap by bulk to Taiwan, with offer prices widening to $383-400/mt CFR.
While the finished steel markets have remained stable in Vietnam, import scrap prices in the country are under pressure. A deal for ex-US containerized HMS I/II 80:20 scrap was signed at $385/mt CFR Vietnam. Ex-US West Coast HMS I/II 80:20 offers for bulk cargoes to Vietnam are at $415-417/mt CFR. Meanwhile, deals for Japanese H2 grade scrap to Vietnam were closed at around $400/mt CFR.
SteelOrbis’ reference prices for ex-Japan H2 scrap have widened this week to the range of JPY 50,000-54,000/mt ($344-372/mt) FOB. The lower end is represented by the deals done by Taiwanese producers, while the upper end is represented by Vietnam’s purchase prices.