Turkey’s import scrap market has declined by a further $7.5/mt week on week, with Turkish mills continuing to show little to no interest in the offers shared by sellers since the beginning of the week.
The last deal has been from the US, today, June 19, which had been expected for a long time to give an indication for the rest of the market, and was closed by an Iskenderun-based producer with HMS I/II 80:20 scrap at $388/mt CFR, a 1.79 percent drop from yesterday, June 18. A downward trend of the deep sea scrap prices was the general expectation, but this latest drop came as a surprise to some market players who thought that the market was close to the bottom. Market sources report that there are more cargoes for sale on the US side.
The euro’s depreciation against the US dollar has created an additional downward push, while EU-based suppliers were the first ones to reduce their offers to Turkey. It had been a long time since we heard an ex-US deal, though. With the euro standing at 1.146 as of today, European suppliers already state that their dollar-based quotations to Turkey have moved down by at least $3/mt from the levels early this week. Today, an ex-Hamburg cargo was offered to Turkey at around $382-383/mt CFR, SteelOrbis has heard. Whether these prices can be achieved in the coming week is yet to be seen. A source at a major Turkish mill today stated, “It is not even the margin anymore. We are receiving almost no demand from the finished steel side, so this is now a production issue. The positive expectations for the post-holiday period were never realized. More pressure on raw material prices shall be expected if several mills decide to cut production.” Another source in the EU scrap market said he considers that deep sea scrap prices are now very near the bottom, adding, “Our collection prices are not dropping further and freight is not changing despite the recent developments on Iran’s side. This US deal is in line with the $382-383/mt CFR range for ex-EU scrap.” European exporters’ scrap collection prices have been at €280-285/mt DAP this week, though sources report that the lower end is not appreciated much by sub-collectors.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have decreased by 1.91 percent week on week. The prices are now 6.56 percent lower month on month in the deep sea segment, with prices being in the range of $381-388/mt CFR.
Domestic ferrous scrap prices in the local US market settled sideways across the board in June; now, participants are setting their sights on expectations for July. Most believe that it will be a similar outcome as in June, with stability prevailing in the trends for each grade. Yet some fundamentals could cause some grades to increase by a small margin, as with prime grades. And price differentials between markets could make some locations catch up to others on certain grades.
Scrap prices to the US East Coast and US West Coast have decreased in the past few weeks, at a different pace depending on the market. On the US West Coast, bulk scrap prices to docks fell by $25/gt during the weeks of May 15 and May 26, with HMS I falling to $250-260/gt delivered to Los Angeles export yard, from $275-285/gt delivered before. Containerized scrap prices have followed suit on the US West Coast. The price of HMS I/II 80:20 has fallen by $5/mt for three consecutive weeks; to $330/mt FAS Long Beach port from $340/mt FAS port previously. And on Wednesday there were reports that quotes were already being negotiated for the grade at $325/mt FAS port.
Ferrous scrap export prices from the US West Coast remained unchanged on Wednesday, as Asian scrap demand has remained stagnant. Some contacts believe the bearish trend in Asia is seasonal and will recover; they point to a historically soft period between June and August, with the latest soft periods extending into October. They also note that higher summer energy costs, along with the rainy season in several Southeast Asian countries, affect steel demand and scrap consumption.
Scrap prices to the US East Coast (USEC) docks were divergent on Tuesday this week but overall retained their bearish trend seen in the past few weeks. The fire at recycler and exporter EMR’s facility in Camden, New Jersey, has decreased the demand for shredder feed, even though it continues to accept cut grades and non-ferrous material. In New York and Philadelphia, the price of shredder feed to docks decreased by $30/gt this week.
Prices for Mexico’s domestic scrap market have remained stable in the northern and central regions with only a decrease in the Bajio area as some mills have started to implement decreases on all grades by MXN 400/mt range. The national market is entering a period of uncertainty as it becomes apparent that mills are trying to push down the market and sellers are not ready to acknowledge the downtrend. Some mills have issued announcements of price decreases, by the same margin, for as soon as tomorrow, in Bajio. Some announcements mention the decrease will take place next week.
In the meantime, in the northern region of Mexico, prices remained unchanged at MXN7,900/mt ($459/mt) delivered consumer for #1 busheling, MXN6,000/mt ($349/mt) delivered for HMS I, MXN7,000/mt ($407/mt) delivered for P&S 5ft, MXN7,900/mt ($459/mt) delivered for shredded, and MXN5,100/mt ($296/mt) delivered for machine shop turnings (MST).
A rather uneven scenario has emerged in the Italian scrap market this week, with different decisions on scrap purchase prices made by different steel producers.
According to traders, mills are trying to lower their scrap purchase list prices by €5-10/mt, with few volumes handled in the local market. "It's a lackluster month," a source said, adding, “The declines have not yet materialized into significant sale volumes."
Mills, on their side, are reporting a low willingness to buy. As a result, some producers have chosen to keep scrap purchase prices unchanged, while others have chosen to decrease their list prices by €5-10/mt depending on the grade and producer.
On the import side, prices from Germany continue to be quite high for the Italian market, and the incidence of transport costs by truck and train, which will become heavier as the summer season approaches, still needs to be taken into account.
Finally, it is worth mentioning that - according to local media reports in Italy - the furnace of a steel producer has been placed under seizure for an indefinite period following an accident involving a 55-year-old worker, but the company has not yet released any official communication.
A more defined situation has started to emerge in the German scrap market during the third week of June.
While some scrap price increases had been recorded last month against a generalized stability in other European markets, Germany has showed a mainly stable trend in terms of scrap purchase prices in June. According to sources, two of the largest German steel producers have purchased E1 scrap at €285/mt and €290/mt, respectively.
As for export markets, German-based export yards have also decreased their purchase prices of HMS I/II 80:20, from the previous €290-295/mt DAP to about €285/mt DAP, down by about €10/mt week on week.
Import scrap prices in Taiwan are moving down as demand remains sluggish in the country during the rainy season, while Vietnam is seeking lower scrap price levels from both US and Japanese suppliers.
Offer prices for ex-US HMS I/II (80:20) scrap in containers to Taiwan have moved down to $352/mt CFR, from the $353-357/mt CFR levels recorded last week. Offers from the US West Coast to Vietnam for bulk HMS I/II 80:20 scrap are at $400/mt CFR, stable as compared to last week. There are no deals done from the US West Coast to Vietnam this week, sources report. Offers for the same grade from Australia have been heard at $390/mt CFR to Vietnam. Japanese suppliers have remained out of the market and did not share offers with Taiwan this week.
Pakistan’s import scrap market has weakened further over the past week, with trading activity remaining limited. Ex-UK/EU shredded scrap offers have been heard at around $415/mt CFR Qasim this week, down by around $5-10/mt from $420-425/mt CFR Qasim heard last week. According to sources, since late last week transactions for European shredded have been reported at $415-417/mt CFR, and, after touching $415/mt CFR in a contract last Saturday, buyers have been pushing for $410-414/mt CFR. Meanwhile, in the Pakistani domestic market, sentiment has improved slightly following the announcement of the federal budget, with market participants expecting stronger construction activity in the coming weeks. However, actual demand remains weak for now, while mills continue to purchase raw materials only for immediate requirements.
Bangladesh’s import scrap market has come under downward pressure this week, with some fresh bookings concluded after discounts, while overall sentiment has remained cautious amid weak finished steel demand, higher electricity costs and ongoing negotiations for lower workable levels. More specifically, ex-EU shredded scrap in containers has been heard at around $405/mt CFR Chattogram this week, slightly below the $405-415/mt CFR Chattogram range heard last week. Meanwhile, ex-EU HMS I/II 80:20 scrap in containers has been considered achievable at around $378/mt CFR Chattogram, compared to the $390/mt CFR Chattogram level heard last week. As for deals, 2,000 mt of ex-Australia shredded 211 scrap have been sold at $410/mt CFR Chattogram this week, while 5,000 mt of PNS scrap from Singapore/Malaysia have been sold at $420/mt CFR Chattogram. Market sources have indicated that mills remain cautious regarding fresh import bookings, with buying decisions largely dependent on achievable discounts and the evolution of domestic steel demand in the coming weeks.
