Turkey’s import scrap market has fluctuated within a very narrow range this week. While mostly due to delivery terms, European scrap quotations were very close to ex-US prices at one point. At the end of the week, the price gap between these two origins is once again around $5-6/mt, with bonus scrap gaining some ground instead. The generation of higher grade scrap was slower in the EU, and the price difference between HMS I/II 80:20 scrap and bonus grade was $25/mt in the most recently heard ex-EU deal from the Netherlands.
The announcement of the new export tax in Russia effective up to the end of 2024 was the focus of much interest this week, but this decision has had no direct and immediate impact on the Turkish steel market, although some scrap suppliers believe there will be a positive one eventually. The most important development this week was the electricity price hike for industrial usage announced late last night, September 28. Electricity prices for industrial usage will move up by 20 percent as of October 1. This move is expected to cause an additional $10-12/mt cost for Turkish EAF producers.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved up by 0.27 percent week on week. The prices are now 0.54 percent higher month on month in the deep sea segment, with prices being in the range of $369-375/mt CFR.
The October buy-cycle in the US is less than a week away, and it appears that buyers and sellers have alternate opinions as to how next month’s prices will trend. For example, whereas some sources have said they are hearing that mills might try to take prices down by $10-20/gt, other sources point to this week’s flat rolled price increase announced by Cleveland Cliffs, indicating an intent to set a new HRC base price of $37.50 cwt. ($827/mt or $750/nt) FOB mill, adding that the announcement has created widespread skepticism about mills’ potential attempts to take scrap prices down.
Over the past two weeks, the local Italian scrap market has indicated small declines in prices. While Italian market players define prices as “stable”, they also report that in general market activities are on the slow side.
Trading in the Asian scrap market has been somewhat weak, with the Vietnamese steel sector performing slowly. While deep sea scrap purchasing activity in Asia is weakening, short sea scrap deals from Japan have continued to be seen Vietnamese mills have booked ex-Japan H2 scrap at $387/mt CFR, stable week on week.
It is also heard that South Korean steel producer POSCO shared bids for Japanese shredded scrap at JPY 54,000/mt ($362/mt) FOB.
SteelOrbis’ reference price for ex-Japan H2 scrap has declined slightly by JPY 300/mt on the lower end to JPY 50,700-52,000/mt ($340-349/mt) FOB.
Taiwan’s import scrap prices have softened further over the past week, though the local rebar market has seen some activity this week. Over the past week, offers for ex-US HMS I/II (80:20) scrap in containers to Taiwan have moved down from the $375-380/mt CFR range to $370-375/mt CFR. Japanese scrap suppliers have started to share offers for H1/2 (50:50) scrap by bulk to Taiwan at $373-380/mt CFR.
In Bangladesh, trade activity in the import scrap market has remained moderate with most deals heard for containerized scrap at relatively stable levels as compared to last week. In particular, several deals for ex-Australia HMS I/II 80:20 scrap have been reported at $425/mt CFR, the same as last week, while by the end of the week most bids have been voiced at $415/mt CFR. Offers for shredded scrap from Australia and New Zealand have remained at $435-440/mt CFR, while offers for ex-Malaysia and ex-UK busheling scrap have been heard at $465/mt CFR. As for the bulk segment, most offers have remained unchanged though, according to sources, Bangladesh is likely to book new volumes in bulk in the next two to three weeks, while the sector has been facing tight foreign currency supply and more restrictions from the government. Offers for ex-UK HMS grade scrap have been maintained at $430/mt CFR, the same as last week, but, according to sources, prices are expected to decrease by at least $10/mt in the next round of bookings.
In Pakistan, another decrease in import scrap prices in Pakistan has resulted in new bookings this week. In particular, the deal price levels for ex-UK/Europe shredded scrap have settled at $425-428/mt CFR Qasim, versus the tradable levels of $430-435/mt CFR last week. A few deals for around 1,000 mt each have been reported at $425/mt CFR.