Turkey’s import scrap market has remained under pressure this week. While some new deals have been concluded, they were closed at lower price levels, pushing average deep sea scrap prices below $380/mt CFR.
At the end of the week, another ex-Netherlands deal was closed by an Izmir-based producer with the benchmark HMS I/II 80:20 scrap at $368/mt CFR. Market sources report that this cargo is to be shipped in August, while it also consists of bonus grades with a $20/mt premium. Therefore, a slight decline was added to this week’s ex-UK/EU scrap prices which have settled at $368-369/mt CFR now.
Meanwhile, an ex-US cargo sold to a Marmara-based producer was signed for HMS I/II 80:20 scrap at $373/mt CFR and bonus grade scrap at $393/mt CFR, on par with the ex-UK/EU scrap prices recently confirmed. The cargo in question is a prompt one, SteelOrbis has learned. As a result, SteelOrbis’ reference prices have been revised to $373-375/mt CFR for ex-US material.
SteelOrbis believes that a further decline in deep sea scrap prices is possible as Turkish mills are preparing for a long summer with weak demand. However, the remaining room for a decline is not so big as the euro appreciated this week and is not leaving much room anymore for European scrap sellers to consider lowering their prices much. It should be noted that several European steel producers are planning to leave the market earlier this summer or are planning a longer holiday period, reducing their scrap inflow. Meanwhile, the pressure on the US side is increasing. There are rumors of several available cargoes from the US West Coast offered to Turkey. However, the freight and collection prices on the West Coast do not give the impression that a workable level from the West Coast can be achieved, at least for now.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have decreased by 2.81 percent week on week. The prices are now 7.82 percent lower month on month in the deep sea segment, with prices being in the range of $368-375/mt CFR.
Ferrous prices for the domestic US market could remain sideways for next Monday, when the July trading cycle begins after the 4th of July US Independence Day holiday. Scrap demand remains healthy as finished steel production remains high and steel prices keep rising. On the other hand, scrap supply flows are adequate, with some contacts considering material availability as plentiful, which has placed the downward pressure on the market that has preserved the balance.
It should be noted that steel production in the US has been robust but dipped last week. According to the American Iron and Steel Institute (AISI), last week the steel sector’s installed capacity utilization rate dropped to 79.8 percent from 80.2 percent the previous week, ending an eight-week run above 80 percent. Production last week reached 1.84 million nt, not much different from 1.85 million nt the week prior, so the recent dip is not an end to the steel sector’s positive run.
Bulk scrap prices to the US West Coast (USWC) docks fell by $10/gt in California on Wednesday following announcements made last week by exporters warning of a $10-20/gt price decrease in the coming two weeks. Prices for HMS I in bulk fell on Wednesday by $10/gt to $240-250/gt delivered to export yard, P&S 5ft contracted by the same amount to $260/gt delivered, and shredder feed decreased by the same amount to $190-200/gt delivered. San Francisco Bay Area scrap prices also fell by $10/gt and sit $5/gt below their Los Angeles counterparts.
Ferrous scrap prices to the US East Coast (USEC) docks fell on Wednesday for both the bulk and containerized varieties, as some prominent exporters in the region decreased their prices by $10 this week as well. The price of HMS I at the New York (NY) and Philadelphia docks fell by $10/gt to $260-270/gt delivered to export yard, while P&S 5ft dropped by $280-290/gt delivered. Shredder feed remained unchanged at $220-225/gt delivered. Prices to Boston docks remained unchanged this week after falling in the previous couple of weeks; contacts in that market expect prices to keep falling as soon as next week. In the meantime, the price of HMS I to Boston docks was flat at $245-250/gt delivered, P&S 5ft was unchanged at $255-260/gt delivered, and shredder feed was unchanged at $160-165/gt delivered.
Prices in the Mexican domestic ferrous scrap market fell for a third consecutive week as demand has declined due to healthy inventories. Some mills in the Central region have reported robust stock levels of scrap and will not receive more material till July 1. Underlying the healthy scrap flows, some contacts report, are low scrap consumption levels on account of a weak Mexican rebar market. Heavy rains remain an almost daily occurrence in the Central and Bajio regions, curtailing construction activity.
Some mills in the Northern region were seen decreasing their prices for prime grades by MXN500/mt ($28.6/mt) and secondary grades by MXN300/mt ($17/mt). The price of #1 busheling fell by MXN600/mt ($34/mt) to MXN6,670/mt ($382/mt) delivered to consumer, HMS I fell by MXN200/mt ($11/mt) to MXN5,800/mt ($332/mt) delivered, P&S 5ft fell by MXN100/mt ($5.7/mt) to MXN6,900/mt ($395/mt) delivered, shredded fell by MXN200/mt ($11/mt) to MXN7,700/mt ($440/mt) delivered, and machine shop turnings (MST) contracted by MXN100/mt ($5.7/mt) to MXN5,000/mt ($286/mt) delivered.
A rather clear trend has emerged in the Italian scrap market this week. Confirming the absence of significant trading activity, Italian mills appear to sending the message that they are unwilling to buy scrap at present.
According to reports from scrap traders, producers’ price lists have seen further reductions this week, ranging from €10/mt to €25-30/mt depending on previous base prices. However, this trend seems to be only nominal. Mills are buying negligible volumes, some of them are already slowing down or halting operations for summer, while others have suspended, or partially suspended, scrap withdrawals.
As for imports, scrap purchases from foreign suppliers seem to have declined by €10-15/mt for now, though it will be necessary to wait until mid-July to identify a clearer trend.
Regarding average scrap price levels in Italy, decreases have been between €5/mt and €10/mt. It should be noted that, within the HMS category, E1 scrap stands at €280-290/mt, while E3 is at €300-325/mt.
The leading Japanese EAF-based steel producer Tokyo Steel has cut its local scrap procurement prices today, July 3, for separate grades in two regions. The lower demand received from the traditional export markets such as Taiwan and Vietnam is exerting pressure on Japanese scrap suppliers. Japanese steel producers are taking advantage of the situation by lowering their scrap procurement prices wherever they can, SteelOrbis observes. Also, the inventory levels of Japanese buyers are currently at sufficient levels.
Despite the revisions announced today, the general price range for H2 grade scrap has moved sideways as compared to the levels recorded on June 26 to JPY 53,000-54,000/mt ($329-335/mt) depending on the mill.
Due to several factors, trading activity in Taiwan’s import scrap market is scarce, with Taiwanese mills just concluding sporadic purchases from the US, while Japanese suppliers are only offering premium grades starting from this week. The steel segment performance is weak, while market sources do not expect steel demand to recover under the current conditions. “The market is frozen and may be entering a long bearish trend because of the ongoing problems about environmental regulations on the construction side, and given the seasonal rainy and typhoon summer weather.
Offer prices for ex-US HMS I/II (80:20) scrap in containers to Taiwan have moved to $339-330/mt CFR, from the $343-348/mt CFR levels recorded last week. Actual prices in ex-US deals have moved down by another $5/mt week on week to $335-338/mt CFR. Japanese suppliers are still absent from the market and there have been no offers shared for Japanese bulk H1/2 (50:50) scrap with Taiwan this week. Meanwhile, ex-Japan shredded scrap offers to Taiwan are at $380/mt CFR and are considered to be expensive as compared to ex-US containerized scrap offers.
Vietnam is following the downward trend of international scrap prices as domestic steel producers exert pressure on import scrap prices. Japanese suppliers are out of the market despite the decreased freight between the countries, since the volatility of the Japanese yen is causing market players to be cautious.
Offers from the US West Coast to Vietnam for bulk HMS I/II 80:20 scrap has softened slightly from $390/mt CFR to $385-390/mt CFR. Following the ex-Japan H2 grade scrap deals done in Vietnam last week at $370/mt CFR, the workable level is still the same. The Japanese yen’s trend against the US dollar has been impacting the market for some time now.
Pakistan’s import scrap market has remained under downward pressure over the past week, with sentiment weakening further as buyers have continued to push for lower levels amid subdued finished steel demand and pressure on local scrap and rebar prices. Ex-UK/EU shredded scrap has been sold at $400/mt CFR Qasim this week for August-arrival cargoes, down from around $413/mt CFR Qasim reported last week, while current offers are reported at $398-400/mt CFR Qasim and buyers’ bids have been voiced at around $395/mt CFR. As a result, the current workable range for ex-UK/EU shredded scrap is assessed at around $395-400/mt CFR Qasim. As for ex-UAE material, no fresh confirmed offers or deals have been reported this week, while market sources expect additional downward pressure once UAE supplies become more stable.
Bangladesh’s import scrap market has posted a decline in terms of prices and, even though some deals after discounts have been done, most buyers are cautious amid weak finished steel demand and expectations that import scrap prices may soften further. SteelOrbis has learned from trade and industry circles that sentiment is still subdued, though some market participants expect a gradual improvement towards late July or early August. More specifically, ex-UK shredded scrap in containers has been sold at $400/mt CFR Chattogram this week, down by around $5-6/mt compared to the latest offer levels recorded last week, while ex-EU shredded scrap has been offered at the same level. As for ex-EU HMS I/II 80:20 scrap in containers, the price assessment is around $370/mt CFR, $5/mt below the price seen last week. In the bulk segment, ex-US West Coast HMS I/II 80:20 scrap has been offered at $400-405/mt CFR Chattogram this week, down by around $5/mt compared to last week. In the meantime, the local Bangladeshi market has shown no clear signs of recovery, as finished steel sales have remained slow and mills have continued to procure scrap only for immediate requirements.
