At the beginning of the week, expectations regarding further developments in Turkey’s import scrap market were still positive, taking into account the present demand for import scrap and the rather firm markets for finished steel. In the following days, Turkey’s import scrap prices continued to increase. The scrap flow in the EU region was on the low side and collection quotations at EU-based export yards also recovered quickly, but sub-collectors were in no rush to sell even at these levels.
Today, Turkey’s import scrap market has continued to record successive price increases, while sellers are in no rush to conclude sales, trying to remain on the safe side amid the rises observed in collection prices. On the other hand, Turkey continues to show demand for scrap with the support of rising finished steel prices and higher steel demand. An EU-based export yard increased its collection prices to €360/mt delivered to Amsterdam port. SteelOrbis reported yesterday that a German sub-collector received bids from the Netherlands at €365/mt delivered. Some market players said that, even with the rising collection prices, scrap flow to yards is not fast. “Everyone wants to see where this is going and so they keep what they have in hand,” a source said. Another source commented, “At one point, these waiting parties will want to realize their profits and start to minimize risks. That will be the turning point.” SteelOrbis hears that some premium scrap suppliers are now aiming for $460s/mt CFR. Besides Turkey, scrap demand in Bangladesh and India is also lively.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap in CFR terms has moved up by 6.91 percent week on week. The prices are now 8.94 percent higher month on month in the deep sea segment, with prices being in the range of $440-450/mt CFR.
The local German scrap market has indicated further price increases in the month of February. The main reason for this rise was the lack of scrap availability in the region. As anticipated by SteelOrbis, demand has recovered somewhat in Germany during February, though mills are observed to be showing resistance to the price increase. Amid the slower economy in Germany, scrap generation in Germany has declined by fifty percent. “Along with the cold weather conditions negatively impacting collection activities in the past month, there is an economic slowdown, and so scrap generation has been disrupted,” a German source reported.
According to the latest data provided by the BDSV, in the first 20 days of February scrap prices moved up by €3.9-14.1/mt month on month. Additionally, the year-on-year decrease is now in the range of €44.2-102.6/mt.
The expectations for March are positive. Market players believe that the tight availability will provide support for prices. Under the current lively demand conditions, market players are in no rush to conclude sales to Turkey, to export yards or to sub-collectors. Also, some plants in the EU are coming back on stream. “People should remember that the construction season in Germany is approaching, hence structural steel production will increase in the coming period,” a source added.
SteelOrbis has learned that the average price range for containerized HMS I/II 80:20 scrap in Los Angeles is now being heard at approximately $370-385/mt, freight alongside ship (FAS), against $385/mt FAS a week ago.
The dock delivered price range for plate and structural (P&S) scrap in Los Angeles has declined in the past seven days and is now being heard at approximately $290-310/gt, against $300-$20/gt, a week ago.
The average price range for containerized HMS I/II 80:20 scrap in Los Angeles is now being heard at approximately $370-385/mt freight alongside ship (FAS), against $385/mt FAS a week ago.
Even though the international scrap market is moving up led by the trend in Turkey, the Vietnamese scrap market has showed some resistance to the rising trend and buyers there have lowered their bids for import scrap. The Vietnamese steel market is “still quite slow. That is why most Vietnamese mills are not following up offers with higher price levels yet.”
Offers to Vietnam for Japanese bulk H2 scrap prices are currently in the range of $440-445/mt CFR, down from $445-460/mt recorded last week. Vietnamese players report that workable levels for this grade are at around $435/mt CFR.
A Vietnamese buyer has targeted $440/mt CFR for ex-US bulk HMS I/II 80:20 scrap this week, $10-20/mt lower than last week’s ex-US offers at around $450-460/mt CFR, but $10/mt higher than another buyer’s bid for this grade last week.
An ex-Hong Kong HMS 50:50 scrap cargo was sold to Vietnam this week at $435/mt CFR. This level was the lower end of last week’s offers at $435-445/mt CFR.
Tokyo Bay FAS based prices for H2 grade scrap are at JPY 52,500-53,000/mt ($389-393/mt), slightly lower than the levels recorded last week at JPY 53,000-53,500/mt (396-400/mt). This new level signals JPY 53,500-54,000/mt ($396-400/mt) FOB for this grade.
As a result, the SteelOrbis reference prices for ex-Japan H2 scrap have changed from JPY 53,000-54,000/mt ($396-403/mt) FOB to JPY 51,000-54,000/mt ($378-403/mt) FOB week on week. Currently, the lower end is represented by Hyundai Steel’s bid for Japanese scrap, while the upper end is represented by Vietnamese buyers’ bids that have been standing firm for two weeks.
Domestic scrap flow in South Korea is considered to be healthy, despite the reduced procurement prices of mills. Market players think that this is limiting the impact of the international scrap market’s upward trend in South Korea. “We are in a slightly different situation here, but this decrease in prices is not expected to be a trend. Finally, we will be forced to follow the international market,” a source reported.
SteelOrbis has learned that Hyundai Steel has shared a bid for Japanese H2 grade scrap at JPY 51,000/mt ($378/mt) FOB.
Hyundai Steel has also released bids for HS scrap at JPY 54,000/mt ($401/mt) FOB, JPY 2,000/mt or $36/mt lower than the levels on February 2.
Meanwhile, Hyundai Steel’s bids for HMS I/II 50:50 scrap stand at JPY 51,000/mt ($378/mt) FOB.
During the past week, slower demand for steel in Taiwan has caused a temporary softening in the deep sea scrap segment. Despite the sharp increases observed in the international scrap market, US suppliers accepted lower quotations at the beginning of this week, before quickly changing their minds and increasing prices again. Japanese scrap has softened a little week on week, but whether this will be a persistent trend remains to be seen. SteelOrbis believes that Turkey’s strong import scrap prices will eventually have a positive impact on the Asian scrap market.
Deals for ex-US HMS I/II 80:20 scrap in containers are still at $410/mt CFR, but a market player stated, “It is heading to $415/mt CFR. The number of offers is on the low side.”
Offers for Japanese H1/2 50:50 scrap by bulk to Taiwan are currently at $430-435/mt CFR, slightly lower as compared to $430-440/mt CFR last week.
In Bangladesh, numerous deals for containerized scrap have been reported this week at mainly the same price levels as last week or slightly higher. More specifically, several deals for ex-UK HMS grade and shredded scrap in containers have been heard at $460-465/mt CFR and $485-490/mt CFR, mainly the same as last week. Besides, a few more deals for ex-UK PNS scrap have been signed at $498/mt CFR, up by $3/mt week on week, according to sources. Furthermore, more deals for ex-Malaysia scrap in containers have been reported at $478/mt CFR for HMS I/II 90:10 scrap, up by $5-7/mt over the past week, and at $495/mt CFR for PNS scrap, up by $5/mt week on week. Besides, market insiders have reported new contracts for PNS scrap from Singapore at $480-490/mt CFR, the same as last week. Such active negotiations for scrap in containers are explained by the rather strong necessity of local producers to replenish their stocks in the absence of bulk scrap suppliers.
In Pakistan, import scrap activity has remained under pressure from ongoing issues with the opening of letters of credit (LCs). At the same time, import HRC prices have continued to increase, with only occasional deals reported in the market. In particular, new offers for ex-UK shredded scrap in containers have been reported at $470-472/mt CFR, versus $465-470/mt CFR last week, with several deals for small tonnages (around 500 mt each) reported to have been done at $468-470/mt CFR this week.