Earlier this week, deep sea scrap prices in Turkey showed signs of stabilization following the high number of deals already done since the beginning of the month. Despite the initial expectations of a continuation for the previous upward trend, initial ex-US scrap bookings shared with the market did not show any price increase. Sellers started to admit that Turkey’s import scrap market may have hit peak price levels, though they thought there was no room for a sharp decline in prices either.
However, in the following days, Turkey’s import scrap market saw increased price levels for ex-US cargoes, more in line with the previous expectations voiced earlier this month, though market sources were cautious about their sustainability. Meanwhile, billet offers with short delivery periods and local Turkish billet prices are gaining strength, while the Asian billet market is softening.
European scrap exporters’ collection costs in the Benelux region have increased to €250-255/mt DAP, SteelOrbis has heard. With the euro-US dollar exchange rate at 1.1676, their export prices are not expected to soften in the short run. “It will depend on freight costs though,” a European scrap supplier said on October 15, adding, “The new tension between the US and China about ocean transport is not helping either.” The softening seen on China’s side at the end of the week has also resulted in changes in sentiment, market sources report. Today, October 17, a source at a major mill said that the fall in China will lead them to wait out next week and it is expected to exert pressure on deep sea scrap prices once again. The latest square billet offers from China to Turkey have been set at $457-462/mt CFR depending on the seller, down from $460-465/mt CFR earlier this week, with buyers’ price ideas not exceeding $450-455/mt CFR levels. Local billet prices in Turkey have settled at $510-515/mt ex-works across Turkey. On the other hand, high freight costs still provide support for deep sea scrap prices and they are expected to remain high for some more time. Some buyers in Turkey are now mentioning possible delays in their shipments and are seeking to avoid this happening. European suppliers’ collection dynamics and costs have not changed this week, giving them an edge to keep their prices firm in the coming week. SteelOrbis believes the coming week will start at a standstill and may be a slow one in terms of deep sea scrap bookings.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved up by 0.29 percent week on week. The prices are now 5.06 percent higher month on month in the deep sea segment, with quotations being in the range of $342-353/mt CFR.
US ferrous scrap prices for October delivery in the US Ohio Valley and US Northeast settled $10-20/gt less during this week’s October buy-cycle negotiations as a result of reduced scrap buying from US mills as annual maintenance continues to reduce raw materials demand, scrap insiders told SteelOrbis.
US scrap prices for November are seen mostly sideways to recent lower October settlements, fueled by continuing mill maintenance and unremarkable finished steel demand, scrap insiders told SteelOrbis this week.
Despite claims from some scrap suppliers surveyed who reported that some yards were withholding supplies from the market, it appears from most surveyed that inflows into Midwest and Northeast collection yards remain active despite recent price declines.
“Yes sir, (collections are) flowing well,” remarked one upstate New York-based scrap dealer, following the recent lower October settlements. “With the mills, we’ve been pretty busy,” he said. “The market was down $10/gt on shredded and P&S scrap, and down $20/gt on busheling. Everything else finished sideways.” Another US Midwest supplier remarked that his spot scrap demand remained limited. “We’re not really hearing much yet for November,” he said, leaning towards a sideways settlement. “A lot of people seem to be holding tons back. It’s very slow from a trucking standpoint right now, and so, the speculation is that December and January will be up,” he added.
Based on a current mostly sideways to October settlement, US Midwest prime busheling scrap - which settled on average $20/gt less during October negotiations - could settle for November in the US Ohio Valley at $395-420/gt ($401-427/mt) on delivered basis, while shredded scrap, which saw a recent $10/gt monthly decline, could settle sideways near $365-370/gt ($371-376/mt), delivered. Ohio Valley HMS grades which moved $10/gt lower in October, could trade flat near $315-335/gt ($320-340/mt), while P&S scrap, which settled on average also $10/gt less in US domestic Midwest markets, could trade for November near $351-361/gt ($357-367/mt).
The sharp decline in the Italian scrap market has been slowing down this week. Almost all mills have greatly reduced their stocks and now find themselves needing to restock even though the long product market is not in good shape. As a result, mills who have sufficient stocks have been able to adjust their purchase prices downwards by a few more euros, while producers with greater needs have slowed down the decline in their scrap bids. Scrap traders, in fact, have reported that - due to the previous declines - scrap collection has become harder, considering the modest scrap availability in the Italian domestic market. According to the information collected by SteelOrbis, scrap grades E1/E3 and E8 In the local scrap market in Italy have declined further, by about €5/mt.
Scrap purchase prices from local mills in Germany have confirmed their decline by a range of €10-20/mt depending on the scrap quality and on the region. Scrap demand is poor from the local market and, as market sources have reported, scrap suppliers have been trying to sell their material to neighboring countries. “My [scrap] sales volumes in October have been average for this period, but the conditions are not favorable for a price rebound. I don’t expect further reductions either, but I suggest using caution in this last quarter,” a local scrap supplier commented. As for exports, HMS I/II 80:20 scrap collection prices at ports have increased a little compared to last week, and have now stabilized at €245-250/mt CIF.
The local Polish scrap market has remained mostly silent this week, with local purchase prices from mills down by around €15/mt compared to September levels. Local market participants have reported mills struggling with traditional steel production levels and favoring semi-finished imports instead of local scrap utilization. In terms of scrap imports, transactions from Ukraine are continuing from local Polish mills, and scrap suppliers this month have intensified their sales to Germany, especially to a couple of mills in the eastern part of the country. HMS I scrap collection prices at ports remain range-bound, reported at around €245/mt DAP this week, versus €240-247/mt DAP last week.
The leading Japanese EAF-based steel producer Tokyo Steel has announced another price increase in its domestic scrap purchase prices, this time for the Okayama and Kyushu regions.
The general range for Tokyo Steel’s H2 grade scrap purchase prices has moved up on the upper end by JPY 1,000/mt to JPY 37,000-43,000/mt ($245-284/mt) depending on the mill. The Takamatsu region still represents the lower end of the general range, though the upper end is now represented by the Kyushu plant.
Taiwan’s demand for import scrap has remained sluggish this week as mills are struggling to sell finished steel, particularly rebar. The number of ex-US scrap offers to Taiwan is low, while Japanese suppliers are refraining from giving offers to Taiwan as their domestic market is livelier in terms of prices and demand.
Over the past week, the offer prices for ex-US HMS I/II (80:20) scrap in containers have remained relatively stable, moving from $299-303/mt CFR to $300-302/mt CFR. Additionally, actual deal prices have moved down by just $1/mt to $295/mt CFR.
Offers for Japanese H1/2 (50:50) scrap bulk cargoes have disappeared completely once again, following the only offer shared last week at $315/mt CFR.
Vietnam’s import scrap market has recorded another increase in the current week, with buyers accepting a rise in actual deal prices. Despite the upward push on prices, Vietnamese buyers point to the low demand in the construction segment due to the ongoing rains.
Ex-Japan H2 grade scrap sales to Vietnam have been closed at $325/mt CFR, increasing by $5/mt on the upper end. Ex-US bulk HMS I/II 80:20 scrap offers have moved up by another $5/mt on the lower end to $350/mt CFR Vietnam.
South Korean steel producer POSCO has bid at a stable price for Japanese scrap compared to its bid on September 26, though with no response from Japanese sellers amid increased price levels in their domestic market.
POSCO has kept its bids for Japanese HS grade scrap stable at JPY 49,000/mt ($326/mt) CFR, down by $1/mt as compared to the level recorded on September 26. POSCO has kept its bid prices for Japanese shindachi unchanged at JPY 49,000/mt ($326/mt) CFR and shredded A grade scrap at JPY 48,000/mt ($319/mt) CFR.