Turkey’s import scrap market continued to remain active in the current week, starting from Monday. Ahead of the SteelOrbis Fall 2023 Conference & 89th IREPAS Meeting to be held on September 17-19 in Istanbul, deep sea prices have remained stable in a new deals concluded to Turkey.
European scrap collection prices are still in the range of €305-310/mt DAP for exporters. There is an expectation of a rise in prices if the demand coming out of Turkey accelerates. This expectation is supported by the domestic sentiment in the EU, with the return of the producers from their holidays having a positive impact. SteelOrbis hears that offers from the EU are mostly at around $373-375/mt CFR. Turkish steelmakers think that the current deep sea scrap prices are close to hitting their peak, if not already there. “We needed scrap and accepted the recent firm stance of scrap exporters with a slight increase. But higher levels than these do not support our finished steel prices,” the representative of a Turkish mill said. An ex-Baltic-scrap supplier stated that the financial burden of keeping finished steel and scrap in inventories during the same period is hard for mills, stating, “The current levels of scrap prices are high and result in very narrow margins for Turkish mills, almost around $200/mt. Whether this is sustainable or not, we will have to see.”
At the end of the week, Turkey’s import scrap market is still moving sideways, with deep sea scrap quotations remaining firm, while Turkish mills are trying to complete their cargoes for shipment in October. It is noteworthy that demand coming from Turkey’s competitors has been slower.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved up by 0.4 percent week on week. The prices are now 0.61 percent higher month on month in the deep sea segment, being in the range of $371-377/mt CFR.
Sources have confirmed that scrap prices in the Ohio Valley and the US Northeast have settled at sideways for cuts and shred and down $50/gt on primes. Previously, one market source had pointed out that $450/gt for busheling scrap was “not supportive” of current HRC prices, which in some cases were being heard at as low as +/- $32 cwt. ($705/mt or $640/nt), and in some cases, less than that, for volume orders. This, sources said, was the driving factor behind why mills pushed so hard to take primes down during this month’s buy-cycle.
SteelOrbis has learned that the current price for Mexican domestic shredded scrap is now at MXN 5,650/mt ($321/mt), stable in pesos compared to last week. Additionally, HMS I/II scrap prices are being heard at MXN 4,950/mt ($281/mt), compared to MXN 4,850/mt ($280/mt) last week.
The local Italian scrap market has not yet given any clear indication of its likely future trend. Market players think that prices may settle before the current week ends. According to market sources, domestic scrap prices for some grades have declined by €10-20/mt over the past two weeks.
Domestic scrap prices in Poland have increased significantly over the past month. Market players report that Polish steel producers may be increasing their scrap procurement quotations to support their finished steel prices. SteelOrbis had previously reported that Polish steelmakers had continued production as usual while other European mills were taking a break over the holiday season.
The leading Japanese EAF steel producer Tokyo Steel has raised its local scrap purchase prices for three of its plants, while this move also means a retraction of the price reduction made for the Utsunomiya plan on September 2. Despite the price changes, Tokyo Steel’s general range for H2 grade scrap is still at JPY 48,000-51,000/mt ($326-346/mt) depending on the mill.
As anticipated by SteelOrbis, Japan’s Kanto scrap tender has been closed with an increase in prices, with the destination being Bangladesh. The average Kanto tender price was at JPY 51,316/mt ($349/mt) FAS, indicating a rise of JPY 1,517/mt, increasing by only $2/mt on US dollar basis due to the depreciation of the Japanese yen from JPY 143.44 to the dollar to JPY 147.28 since August 9.
Vietnamese mills have accepted higher levels for Japanese scrap after the Kanto tender which closed with a slight increase, but it is observed that deep sea scrap prices from the US are declining in the country amid the lack of demand. US West Coast HMS I/II 80:20 offers for bulk cargoes are still coming to Vietnam in the range of $410/mt CFR, $10/mt lower on the upper end as compared to the offer levels recorded last week. Meanwhile, ex-Japan H2 scrap offers are at $390/mt CFR, $10/mt higher on the lower end as compared to the offer levels recorded last week.
Import scrap offers to Taiwan have increased over the past week, though it is observed that actual deal prices have remained stable week on week. Over the past week, offers for ex-US HMS I/II (80:20) scrap in containers to Taiwan have remained stable at $375-380/mt CFR. Following the Kanto tender which indicated a small price increase, Japanese scrap suppliers started to share offers for H1/2 (50:50) scrap by bulk to Taiwan at $380-390/mt CFR.
While most South Korean producers have been staying away from imports due to planned maintenance works or the more attractive domestic scrap prices in the country, South Korean steel producer POSCO has continued to buy Japanese scrap. SteelOrbis has learned that POSCO has shared bids for shredded scrap at JPY 57,000/mt ($385/mt) CFR or JPY 54,000/mt ($365/mt) FOB. A South Korean source reported that the indications for ex-US West Coast HMS I/II 80:20 bulk cargoes are at $405/mt CFR South Korea, because “sellers insist on the price.”
More deals for both bulk and containerized scrap have been reported in Bangladesh this week as local rebar mills have been focusing on restocking. Following quite a long pause in trade for scrap in bulk in Bangladesh, this week market insiders have reported a deal for 32,000 mt of ex-US scrap signed for HMS I/II 80:20 at $430/mt CFR, for shredded scrap at $435/mt CFR and bonus grade at $440/mt CFR. Meanwhile, most offers for ex-US HMS I/II 80:20 scrap have been voiced at around $430/mt CFR. Moreover, a booking for 15,000 mt of ex-Japan H2 scrap in the Kanto Tetsugen export tender has been made at around $420/mt CFR Bangladesh. Meanwhile, in the containerized segment, offers for ex-Australia and ex-UK shredded scrap have decreased to $440-445/mt CFR, down by $10/mt over the past week. Besides, several deals for ex-Australia HMS I/II 80:20 scrap have been signed at $422-423/mt CFR, down by $2-3/mt week on week. Furthermore, another deal for 5,000 mt in total of HMS and PNS scrap from the Middle East is reported to have been signed at $440/mt CFR.
In Pakistan, this week market insiders have reported new deals signed for ex-UK/EU shredded scrap at slightly lower levels. Specifically, new deals for ex-UK/EU shredded scrap are reported to have been signed at $435-437/mt CFR levels, down by $3/mt week on week. At the same time, while some offers are still heard at $440/mt CFR, the same as last week, more foreign suppliers have been ready to provide small discounts, decreasing their offers to $437/mt CFR. In the meantime, most Pakistani customers expect local rebar producers to drop their prices in the next round of bookings, given the slight strengthening of the national currency against the US dollar.