Although scrap prices in Turkey have continued to increase week on week, Turkish mills have put on the brakes on the price uptrend towards the end of the week before prices touched the $400s/mt CFR. Since the higher quotations announced by mills for finished steel have largely not been accepted by the foreign and domestic buyers, Turkish mills state that their sales are not enough to support a further rise in scrap prices. There have been several deals recorded over the current week. The first ones indicated price increases, while the following deals signalled a sideways movement. The most recent ex-EU scrap deals are also rumoured to have been closed at similar levels in the range of $385-387/mt CFR. As a result, it can be said that Turkey’s import scrap market has started to move sideways and the very slow scrap flow particularly in the EU is supporting the current price levels. However, a slight change in the current demand-supply balance may cause this sideways movement to be replaced by a trend in either direction.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap in CFR terms has recorded a 4.83 percent increase week on week. The month-on-month prices are now 4.29 percent lower in the deep sea segment, with prices being in the range of $385-396/mt CFR.
Scrap prices in the US settled on Monday, August 8. Sources note that, in some regions, shredded and busheling settled levels were “at or very close to each other.” Market sources believe that it will still be a few more days before a clearer picture of the September marketplace appears. “I don’t have any thoughts to share as of yet, but I expect we’ll all have more information next week,” a source said. A second source said that, while he’s started to hear some preliminary chatter, the opinions he’s received “are without confidence.” “The opinions I’m hearing so far are mixed,” he added. “Domestically there will be several outages among some large electric furnace shops in the Midwest that will hamper demand, but supplies of obsolete are relatively tight. Export will probably waiver in the $395-400/mt CFR range to Turkey for 80/20 for the foreseeable future. I don’t have any feel for prime. If I had to call it today, I would say sideways on all grades.”
The local Italian scrap market has remained stable over the past week as most players are on holidays. One scrap supplier stated that they are busy meeting their commitments from previous deals done 20-25 days ago, adding, “Most steel plants have stopped but some of their stock yards are still open.” The scrap flow in the EU is disrupted by the holiday season and low river water levels, and collection prices are increasing day by day. As previously mentioned by SteelOrbis, this has prevented local scrap prices from falling during the holidays. However, since scrap trading is currently much lower compared to usual levels, there is no real market price in Italy, which is expected to return from its holidays at the end of August.
While the Japan-based Kanto scrap export tender has indicated a $13/mt price decrease month on month, the decline was significantly lower than the previous $77/mt drop recorded in July. Also, the price levels observed were higher than the recent dock prices in Japan. SteelOrbis has learned that South Korean mills are also evaluating whether the scrap price has hit the bottom or not, though the successful buyer in the tender was not from South Korea. Also, Japan will have a one week-long break for the Obon Holidays. A Vietnamese buyer commented, “Ahead of the holiday, Japanese scrap offers are very quiet, with almost no new offers.” On August 10, the Kanto Tetsugen monthly export tender was closed at the average price of JPY 42,061/mt ($312/mt) FAS, which is down by JPY 2,484/mt or $13/mt from July, taking into account exchange rate fluctuations. This price corresponds to JPY 43,061/mt ($319/mt) on FOB basis.
The winning price translates to $375/mt CFR Vietnam, according to sources. “It is higher than the price levels fixed in deals last week,” a source commented. Last week, a Vietnamese buyer successfully concluded a deal for Japanese H2 grade scrap at $350/mt CFR. Hence, the Kanto tender signals a recovery in Japanese export offers. Also, an ex-Hong Kong offer for HMS I/II 50:50 scrap by bulk to Vietnam was given at $367/mt CFR to Hai Phong, but the buyer had not bid yet. According to a source, “Vietnamese buyers are not reacting quickly to the uptrend of scrap prices since the finished product market is still slow.”
Taiwan’s import scrap market has been silent over the past week, as buyers mention the absence of sellers in the market. “US suppliers did not share any offers this week with Vietnam, but towards the end of the week the Japanese also took a step back due to the Obon holidays on August 13-16,” a source at a Taiwanese mill commented.
As compared to the levels recorded in SteelOrbis’ report published on August 5, the price of ex-US HMS I/II 80:20 scrap in containers to Taiwan has increased from the range of $320-325/mt CFR to $338/mt CFR at the beginning of the current week. But, as mentioned, the offers disappeared over the week. In the current week, prices for Japanese H1/2 50:50 scrap by bulk to Taiwan have indicated an increase from $327/mt fixed in deals to $375-390/mt in offers, both CFR. “This level was too high. The Kanto tender had an impact, but nevertheless this range is not acceptable. Since then, Japan has gone on holiday and no deal at this range has been done,” a source commented. Japanese scrap is traditionally around $10-15/mt higher than US origin scrap.
While the local South Korean scrap market has continued to move down over the past week, the heavy rainfall causing floods all over the country was the main topic in the market. Already with an economy that carries downside risks due to high inflation and regional political and economic tensions, this latest natural disaster has not helped. “Demand for steel has not recovered fully in South Korea, while the flood also reduced the pace of purchases of steel or raw materials,” a source commented. Import scrap is a good alternative to the disrupted supply chain in South Korea, and it is heard that a South Korean mill has concluded a purchase from Japan.
While Hyundai Steel and POSCO have not announced bids for Japanese scrap this week, Dongkuk Steel has bought a small tonnage from Japan in the range of JPY 39,000-40,000/mt ($/mt) FOB.
As a result, the reference price for ex-Japan H2 scrap has increased by JPY 800/mt or $9/mt on the upper end due to the higher levels recorded in the Kanto tender to JPY 39,500-43,000/mt ($299-325/mt) FOB.
There was a rumour of US West Coast bulk HMS I scrap given to South Korea this week at $370-375/mt CFR, though market players believe that this level is too low to be this week’s price.
In Pakistan, business activity has remained muted due to the national holidays in the country this week. However, new offers for shredded scrap in Pakistan have posted another increase. Specifically, at the beginning of the week, import offers of ex-UK/EU shredded scrap in containers to Pakistan were at $480-490/mt CFR, compared to $460-465/mt CFR last week. However, by the end of the week, market insiders have reported new offers already at $490-495/mt CFR, and some even at $500/mt CFR. According to market insiders, several deals for around 2,000 mt were signed at $475/mt CFR at the end of last week, before the Muharram Ashura holidays started.
In Bangladesh, import prices for scrap have significantly increased over the past week given suppliers’ bullish mood and the positive outlook in Turkey. However, most customers have continued to avoid new purchases given the depreciation of the national currency, letter of credit-related issues, and still weak local steel demand. Specifically, market sources have estimated the current level for ex-US mixed cargoes for HMS grade, shredded and bonus scrap at $440/mt CFR and above. No deals have been reported for ex-US and ex-Europe materials, though, by the end of the week talk about a deal for around 30,000 mt of ex-US mixed cargo for HMS grade and shredded scrap signed at $445-450/mt CFR was circulating in the market. However, this information has not been confirmed by the time of publication. At the same time, market insiders reported a deal in bulk for 15,000 mt of Japanese H2 material booked at JPY 43,073/mt ($319/mt) FOB in the Kanto tender. The winning price translates to around $420/mt CFR Bangladesh, according to sources. Meanwhile, offers prices for ex-UK shredded scrap in containers in Bangladesh have been voiced at around $490/mt CFR, up by $10-20/mt week on week, though, according to some sources, the price is likely to increase in the short run. Offers for ex-UK HMS I/II 80:20 scrap have been heard at $460/mt CFR, up by $5-10/mt over the past week.