Following last week’s firm stance by sellers, Turkey’s import scrap market has recorded an upward movement in the current week. The increase was expected as Turkey has a considerable need for scrap for November shipment, while freight costs have risen significantly over the past month and the collection prices of scrap exporters are also providing support.
A question asked in the international scrap markets is why Turkey agrees to increase its import scrap prices when domestic scrap prices are set to decline in supplier regions. While both the US and EU domestic scrap markets are under pressure from the lower bids received from local mills, domestic price cuts are not expected to impact export yards much since the prices are still higher than export yards’ purchase prices. Meanwhile, increased freight costs are playing a big part in the firm stance of sellers.
As anticipated by SteelOrbis, the upward trend of Turkey’s import scrap market has continued in new deals announced mid-week. Amid higher freight rates both from the EU and the US and also slower scrap flow to export yards, scrap suppliers increased their sales prices given Turkish mills’ continuing appetite for scrap. However, finished steel prices are not providing support, with steel product buyers not interested in higher prices. Some market sources believe that the recent price increase in the deep sea scrap segment has reached its peak. “We do not see any support from finished steel, no improvement on the Chinese side, while hot rolled coil (HRC) and rebar prices are not following scrap’s example. So, even though EU scrap prices are now at around $345/mt CFR, pushing ex-US above $350/mt CFR, this may be the highest point,” a European scrap supplier said.
On October 10, it was heard that an Iskenderun-based producer has concluded an ex-US deal for HMS I/II 80:20 scrap at $350/mt CFR. SteelOrbis has left its reference price for ex-US scrap at $350-351/mt CFR, as a $0.5/mt deviation is expected to be observed next week.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved up by 1.76 percent week on week. The prices are now 2.21 percent higher month on month in the deep sea segment, with prices being in the range of $342-351/mt CFR.
US domestic scrap prices for the month of October are now seen settling lower across all scrap grades as a result of continued low demand from US domestic mills as units will likely remain shuttered for annual maintenance operations through November, scrap market insiders told SteelOrbis this week.
As October buy-cycle negotiations began in earnest this week, most survey respondents were certain that lower settled prices for prime and shredded scrap were likely as supplier inventories on the ground were reported adequate, and domestic mills appeared less apt to chase sideways pricing offers from suppliers as units remained shuttered for maintenance. At midweek, insiders reported to SteelOrbis that cut grades like P&S and HMS were also starting to trend at least $10-20/gt lower on delivered basis.
Based on an average $20/gt decline expectation for delivered US Midwest prime busheling scrap in the US Ohio Valley, October busheling scrap is likely to settle at $395-420/gt, ($401-427/mt), while shredded scrap is seen settling near $365-370/gt ($371-376/mt). Ohio Valley P&S and HMS grades are last seen down $10-15/gt to September settled prices at $351-361/gt ($357-367/mt) and $315-335/gt ($320-340/mt), respectively, scrap insiders told SteelOrbis.
Most players in the local German market seem sure that new scrap price levels will come down by around at least €10/mt in the October round of purchases at the beginning of new monthly negotiations.
German mills have been reporting low demand for finished steel, and scrap suppliers have reported good availability of material coming from the local market, the Italian market and the eastern European market, which is being offered to mills at lower sales prices compared to last month.
As regards scrap exports, a source has reported that demand for HMS scrap is increasing, but the local market prices are still higher than export prices. In fact, E1 and E3 scrap prices in the local market in Germany are standing at around €270/mt and €290/mt delivered to mill, respectively, whereas collection prices to exports yards have been reported at €245-450/mt for the same grades.
The local Polish market seems in line with other local European scrap markets in its decision to lower its scrap price levels. As for exports, however, the market remains stable or is showing a slight uptrend.
According to a source at a local Polish mill, scrap purchase prices in October will decline by around PLN 50/mt (around €12/mt). At the moment, scrap purchase prices of Polish mills are reported at PLN 1,040-1,100/mt (€245-260/mt) for HMS I scrap, PLN 950-990/mt (€220-230/mt) for HMS II scrap and PLN 1,070-1,120/mt (€250-265/mt) for bonus grades. HMS I prices at export yards in Poland are reported in the range of PLN 1,030-1,050/mt (€240-247/mt), up by around €2/mt on the higher end of the range compared to last week.
The Italian scrap market has registered a downward trend this week, with producers’ scrap purchase prices declining by €10-20/mt. Scrap demand continues to be modest, but steel production has resumed at a good pace. This means that, overall, scrap inventories at Italian mills are still on the high side.
On October 9, Japan’s Kanto scrap export tender was closed with a small price increase on Japanese yen basis, with a $5/mt rise in the dollar-based price. In the Kanto export tender, the highest bid was at JPY 44,316/mt ($290/mt) FAS, JPY 2,346/mt higher than last month. The total tonnage of the cargo is 20,000 mt, with the buyer being a Bangladeshi mill. The dollar-based price has moved up by $5/mt from last month’s $285/mt FAS, taking into account the changes in the Japanese yen-US dollar exchange rate. The FAS prices translate to JPY 45,316/mt FOB or $297/mt FOB, up $6/mt as compared to last month.
Meanwhile, the market prices in the Kanto area are at JPY 41,000/mt ($269/mt) FAS, JPY 1,000/mt higher or $2/mt lower than last month.
This week, the Tokyo Bay FAS-based prices for H2 grade scrap have increased by JPY 500/mt week on week to JPY 41,000/mt ($269/mt), down by $2/mt on dollar basis. The FOB-based export price remains at JPY 42,500/mt ($278/mt) for the grade in question, up by $1/mt week on week.
Following the depreciation of the Japanese yen, the leading Japanese EAF-based steel producer Tokyo Steel has announced upward adjustments of its domestic scrap prices, with an increase of JPY 500/mt for all plants except Takamatsu. The first price adjustment was made on October 6 but Tokyo Steel announced another increase after Japan’s Kanto scrap export tender on October 9. Since September 12, Tokyo Steel has raised its local scrap prices gradually, with the total increase now reaching JPY 1,500/mt on the upper end, while the lower end has remained stable. On dollar basis, not much has changed due to the depreciation of the Japanese yen against the US dollar, with the upper end moving up only by $2/mt, while the dollar-based price for the Takamatsu region has declined by $8/mt.
The general range for H2 grade scrap prices has moved up on the upper end by JPY 1,000/mt to JPY 37,000-42,000/mt ($242-275/mt) depending on the mill.
In the current week, Taiwan’s import scrap market has again moved sideways. The public holidays on Monday and Friday of the week influenced demand negatively, while no changes have been seen in the local rebar market.
Over the past week, offer prices for ex-US HMS I/II (80:20) scrap in containers have remained more or less stable, moving from $295-307/mt CFR to $299-303/mt CFR. It is reported that offers from the US are scarce.
Offers for Japanese H1/2 (50:50) scrap bulk cargoes have remained absent, market sources reported, except for one offer shared at $315/mt CFR, amid extremely low demand from Taiwanese mills.
Vietnam’s import scrap market has recorded a slight increase in the current week, though workable levels for ex-US and ex-Japan scrap have not changed. Market sources report that buyers in Vietnam are still cautious, while the rainy season has been impacting steel demand.
Current offers from Japan to Vietnam are at $325-328/mt CFR, increasing by $3/mt on the upper end. Ex-US bulk HMS I/II 80:20 scrap offers have moved up by $5/mt on the lower end to $345-350/mt CFR Vietnam.
Import scrap prices in Pakistan have edged higher over the past two weeks, with some occasional deals concluded despite limited buying interest. However, domestic customers are resisting further increases, as sluggish construction activity keeps rebar demand weak and local rebar prices are under downward pressure. Mills remain cautious in scrap procurement, balancing tighter scrap availability against muted finished steel sales. More specifically, this week most offers for ex-EU/UK shredded scrap in containers have increased to $365-370/mt CFR, up by $2-5/mt over the past two weeks. According to sources, some market participants have reported shredded prices as low as $362-363/mt CFR, attributing the decline to halted mill procurements and mounting market pressure. Meanwhile, offers for ex-UAE HMS/PNS grade scrap have been voiced at $360-362/mt CFR, mainly the same as two weeks ago, while shredded scrap offers from the UAE have remained at $385/mt CFR. At the same time, according to sources, Pakistani rebar mils have been operating at just 30-35 percent of their capacity, with several others remaining idle. Besides, rebar prices have been declining for the past two weeks, reflecting persistently weak market sentiment, while liquidity constraints have also been weighing on demand, as customers refrain from making new purchases.