Turkish mills were forced to increase their deep sea scrap purchase prices late last week amid the ongoing lack of offers, which raised concerns over scrap availability. Market sources report that scrap demand in Turkey increased quickly late last week but was faced with an insufficient number of willing suppliers. As Turkey continues to buy ex-US scrap, European scrap suppliers are also pushing for higher levels in each sale. The euro-US dollar exchange rate is still at 1.1548, remaining relatively stable, but European scrap exporters’ collection costs are also stable in the range of €255-260/mt DAP. Initial sentiment regarding local US scrap prices for the December buy-cycle has changed from stable to potential for a rise in prices. It is also observed that Turkish mills are trying to buy more domestic scrap by increasing their local scrap procurement prices, especially with the ship scrap segment in Izmir attracting attention, with some local mills accepting to pay as high as $363/mt CPT.
While Turkish mills still need to conclude deep sea scrap bookings for January shipments, sellers are in no rush to sell. Scrap availability is an issue ahead of the holiday season. The sentiment in the local US scrap market is changing in a positive direction, giving signals of potentially higher domestic prices in the December buy cycle. On the EU side, scrap scarcity is still seen and sellers report that under the current conditions it is not convenient for them to make offers or do sales for January shipment.
An ex-Belgium scrap booking by an Iskenderun-based Turkish steel producer is reported to have been done for HMS I/II 80:20 scrap at $355/mt CFR, while an ex-Netherlands deal by a mill in the Marmara region indicates that HMS I/II 80:20 scrap prices are now at $356/mt CFR. As a result, SteelOrbis’ reference prices for ex-UK/EU scrap remain in the range of $354-357/mt CFR.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved up by 1.35 percent week on week. The prices are now 2.58 percent higher month on month in the deep sea segment, with quotations being in the range of $354-361/mt CFR.
The December outlook for US scrap pricing remains sideways to potentially higher ahead of the Thanksgiving Day holiday in the US this week, scrap insiders told SteelOrbis. And while December scrap transactions are not expected to closed after the holiday until next week at the earliest, a majority of respondents polled by SteelOrbis this week said they expect pricing to be similar to November at sideways.
“Domestic scrap suppliers are leaning on upward pricing for December, but it’s baseless,” reported one Midwest-based mill scrap buyer. “The market will be sideways in December, with maybe some uptick possible in January. However, December will be another boring and knowable sideways market.”
One Detroit-based supplier begged to differ, offering his weekly expectation for a December market that is “looking $10/ish higher, maybe $20/gt up at best,” he said. Another East Coast rebar dealer expects December pricing could trend up. “Scrap pricing always moves higher in the winter,” he said, adding, “Rebar supplies remain tight and rollings are getting cut or pushed back into future rollings.”
“There are no reports of issues with [scrap] supply,” remarked another Midwest scrap insider, calling the December market sideways. “Also, it’s a holiday month, so there will be fewer operating days and demand will be more limited,” he noted
While steady to higher scrap prices are still seen leading up to the start of December buy-cycle negotiations, based on a developing consensus for a sideways to higher December settlement, US Midwest prime busheling scrap could finish next month near $385-395/gt ($391-401/mt) on a delivered to mill basis. Midwest shredded scrap, which is still called flat to potentially $10-20/gt higher, is likely to finish for December at or above November levels at $365-370/gt ($371-376/mt). Ohio Valley HMS grades which finished sideways for November are likely to settle flat again near $315-335/gt ($320-340/mt), while P&S scrap, which settled flat this month, could settle near its November level at $351-361/gt ($357-367/mt), scrap insiders told SteelOrbis.
Over the past week, Taiwan’s import scrap prices have remained relatively stable, at least for ex-US cargoes, while offers from Japan are still met with resistance from buyers. Thanksgiving has caused ex-US scrap offers to disappear, though their absence has not caused Taiwanese producers to focus on Japanese scrap.
Over the past week, the only offer price shared for ex-US HMS I/II (80:20) scrap in containers was at $296/mt CFR, as compared to last week’s $296-305/mt CFR. Actual deal prices have remained unchanged for this grade at $295/mt CFR, though sources report that ex-US scrap offers have disappeared late this week due to the Thanksgiving holiday in the US.
Offers for Japanese H1/2 (50:50) scrap bulk cargoes have changed from the range of $316-327/mt CFR to a more general range of $315-318/mt CFR. Although the lowest level accepted by sellers remains at $315/mt CFR, Taiwanese buyers have continued bidding at $310/mt CFR and below for this grade. No deals for Japanese scrap have been done this week in Taiwan.