Turkey’s import scrap market has managed to remain relatively stable over the past week. The first deals done in the market have indicated no price change, though the later ones have created some confusion among market players. While Turkey’s import scrap market has lost some of its momentum due to the resistance by Turkish mills this week, some sellers are adamant that they will keep their prices firm and wait until after the holidays.
In Turkey’s import scrap market, buyers and sellers are obstinating with each other. Buyers citing with their slower finished steel sales target for lower price levels, succeeding in some deals. On the other hand, some sellers -due to their expectations of a higher price level in January, especially in their local markets – believe it is not time to bend to Turkish mills’ desire to drop scrap quotations. SteelOrbis has learned that most ex-US scrap suppliers are unwilling to cut their quotations below $370s/mt CFR, the workable level after potential negotiations is at around $367-368/mt CFR. US-based suppliers expect their local market to move up by $20-30/mt during January buy-cycle, adding that the cold weather conditions would disrupt scrap flow further in the coming month when they return from the holidays. In the EU, scrap collection for exporters remain in the range of €265-270/mt DAP, the exchange rate at €1.17 to a dollar is also supporting the CFR Turkey quotations.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved up by 0.21 percent week on week. The prices are now 3.26 percent higher month on month in the deep sea segment, with quotations being in the range of $358-369.5/mt CFR.
January scrap in the US is seen continuing the recent steady to upward price trend following last week’s December buy-cycle settlements, which saw prices up $10-20/gt over all domestic ferrous scrap grades, market insiders told SteelOrbis this week.
During recent December monthly scrap supply negotiations, December scrap pricing rose amid reports that supplier inventories were more limited than prior months because inflows dropped as a result of the recent cold and snowy weather in the US Midwest, even as US mills purchased more scrap in December as steel production facilities returned to operation following the completion of annual maintenance operations. Improved export scrap sales also boosted requirements for US East Coast supplies, they said.
“I heard plus $20/gt to plus $40/gt from two mills, but it’s kinda too early to tell,” remarked one US East Coast scrap insider. “Demand is slowing due to seasonality,” he added.
Direct SteelOrbis conversations with domestic mill scrap buyers found the majority think pricing for January will be sideways. “Mills will stand firm at sideways come January I suspect,” said another Midwest scrap insider. “While dealers will continue to try to ride December’s ‘up train’ on pricing into January.”
“We’re hearing very little new on January scrap,” remarked another Midwest scrap dealer this week. “The expectation, however, is that it will be up, though.”
“I’m hearing about $30/gt higher for January scrap,” said a final SteelOrbis scrap insider. “I’m also hearing that finished products will be up $40/nt for January. That’s the latest buzz.”
Following the rising trend in scrap purchase prices of mills in other European countries such as Germany, Italy and France, Polish mills have also increased their scrap purchase prices by PLN 50-70/mt (€12-15/mt) month on month. According to market sources, Polish mills are now paying an average of PLN 1,145/mt (around €270/mt) delivered for HMS I scrap and PLN 1,040/mt (around €245/mt) delivered for HMS II scrap.
In the export segment, HMS I scrap prices at export yards in Poland have settled at around €250/mt DAP, rising by around €7/mt since the beginning of the month.
Scrap prices in the local market in Germany have indicated increases in December. Negotiations have been tough but rare, and the export market put the local market under upward pressure at the beginning of the month. Lower end-of-year industrial production has resulted in reduced scrap generation and scrap traders have been less willing to sell, which is why consumers needing to secure volumes have had to increase their scrap purchase prices by €5-10/mt.
The latest negotiations in the local scrap market in Italy have been concluded at levels higher by €5-10/mt than the previous prices reported. Although scrap requests at the end of the month are low and the volumes traded are not so significant, buyers with urgent needs have agreed to the higher price levels.
Moreover, according to confirmed information, an ex-US sea vessel with 30,000 mt of HMS and bonus scrap acquired by four different buyers is expected to arrive in Italy by the end of the year.
Overall, reference scrap prices in the Italian local market have marked some upward variations, as in the following table. It should be taken into account that the price ranges within the HMS category are €270-290/mt for E1 and €290-305/mt for E3.
Over the past week, Taiwanese steel mills have shown little interest in import scrap, only buying containerised scrap from the US. The price ideas of Japanese scrap suppliers have failed to find buyers in Taiwan. The sluggish trading in the local Taiwanese rebar market is not helping the situation.
After disappearing for a week, offer prices for ex-US HMS I/II (80:20) scrap in containers are once again heard in Taiwan, at $300-305/mt CFR. Some mills after negotiations have finally concluded ex-US deals at $298-299/mt CFR this week. Japanese sellers have not returned to the Taiwanese market this week.
Vietnam’s appetite for import scrap ahead of the holiday season has remained limited this week. Vietnamese mills are expected to succeed in keeping prices stable for the rest of the year, market sources report.
Over the past week, ex-US bulk HMS I/II 80:20 scrap offers to Vietnam have remained stable at $350/mt CFR. Some market sources report that deals done by some Vietnamese buyers over the past week for Japanese H2 scrap purchases were closed at $325/mt CFR, relatively stable week on week.
The Tokyo Bay FAS-based prices for H2 grade scrap have remained stable over the past two weeks at JPY 43,000/mt ($273/mt), down by $4/mt on dollar basis.