Turkey’s import scrap market started the week with news about older deals, mostly done last week. The pressure on deep sea scrap prices has increased this week as Turkish mills have continued to bid lower price levels, closer to $330/mt CFR, for European cargoes. “Turkish steel producers have concluded a lot of transactions over the past ten days. They do not have to rush to sign more deals right now. However, the few producers that are showing any interest in new cargoes are bidding at very low prices,” a European scrap seller commented.
SteelOrbis has learned that an Izmir-based producer concluded an ex-US booking for HMS I/II 90:10 scrap at $346/mt CFR, which indicates that ex-US HMS I/II 80:20 scrap prices are now at around $343/mt CFR. This price is $0.5/mt lower than SteelOrbis’ previous estimations for this grade. Since this can be considered a sideways movement in price, SteelOrbis’ reference prices for other regions have remained unchanged this week.
The first indications from the EU and the US markets for local scrap prices range from soft to stable. The European steel industry continues to struggle against the backdrop of low steel demand. In the US, there are high allocations of prime grade scrap. Meanwhile, Turkey’s steel sales have not recovered, while local market players are mostly waiting for next week’s interest rate announcement by the Turkish central bank, which is expected to cut interest rates by 200 base points. Despite the easing of monetary policy, Turkish mills are not expecting such a positive impact on trading. For now, the deep sea scrap market in Turkey is still range-bound, following a soft-sideways trend, with the $333-347/mt CFR range continuing to prevail since May this year.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved down by 0.07 percent week on week. The prices are now 0.8 percent lower month on month in the deep sea segment, with prices being in the range of $337.5-343/mt CFR.
The outlook for September US scrap pricing during this month’s buy-cycle negotiations is sideways for a fourth month in a row for most grades, though prime scrap grades like busheling and potentially obsolete shredded scrap grades could see lower prices, market insiders told SteelOrbis this week.
Scrap insiders said yearly mill maintenance programs that begin in September and typically end in November could limit local mill scrap buys this month. Scrap insiders added that prime supply remains abundant since mills were expected to buy more prime scrap during August supply negotiations because many expected US President Trump to follow through on threats to implement 50 percent tariffs on Brazilian pig iron, a key component of US steel production. Once Trump later recanted on the threats - and mills failed to buy - suppliers found they had too much prime grade supply on hand, insiders said. Insiders also added that continued declines in US flat steel pricing was also not supportive of domestic scrap.
Based on a sideways to lower September scrap outlook, US Midwest prime busheling scrap in the Ohio Valley could settle at $20/gt below the $435-460/gt ($443-468/mt) August settlement price, while shredded scrap might settle at or $10/gt below the August settled price at $375-380/gt ($381-387/mt). Ohio Valley P&S and HMS grades are seen sideways to August at $361-371/gt ($367-377/mt) and $325-345/gt ($330-387/mt), respectively, scrap insiders told SteelOrbis.
September has gotten off to a slow start in the Italian scrap market. After an August of production closures and slight price drops, the market sees both steel mills and scrap sellers with full warehouses. A stalemate scenario is emerging. At the moment, producers expect stable scrap purchase prices, even if some of them have already lowered their price lists by about €5/mt for all grades. It is worth mentioning that downward pressure is particularly mounting on busheling scrap (E8), a higher quality for which demand has decreased in recent months.
The local scrap markets in Germany and Poland have remained mostly stable this week. Steel demand remains on the low side in both countries. While in Germany scrap suppliers are beginning to accept that the stability foreseen for this month might translate into a drop in local scrap prices at the end of September, scrap suppliers in Poland are trying to keep their prices high citing scarce availability of the material and good demand. The local scrap market in Germany is still immobile waiting for players to make their decisions after the summer holidays, while Polish mills are expecting to drop their average purchase prices by €5/mt in September. Collection prices at export yards in Poland have been reported at around €254-259/mt DAP for HMS I equivalent scrap, down by €5/mt compared to the last levels recorded by SteelOrbis.
Having started earlier last week, the downtrend of Taiwan’s import scrap market has continued this week. Both import and local scrap markets have recorded price decreases due to buyers’ lack of interest.
Over the past week, the offer prices for ex-US HMS I/II (80:20) scrap in containers have softened further by $2/mt to $305-308/mt CFR. Offered prices for Japanese H1/2 (50:50) scrap bulk cargoes have also softened, from the range of $317-322/mt CFR to $315-320/mt CFR.
Over the past week, Vietnam’s import scrap market has remained relatively strong with prices gaining some ground. Both ex-US and ex-Japan scrap prices have indicated increases and Vietnamese buyers’ bids are rising.
The general range of ex-Japan H2 scrap offers to Vietnam has widened over the past week from $320-330/mt CFR to $320-335/mt CFR. Meanwhile, Vietnamese buyers have concluded ex-US bulk HMS I/II 80:20 scrap deals at $341/mt CFR this week, managing to drop prices by $1-3/mt week on week.
Meanwhile, the Tokyo Bay FAS-based prices for H2 grade scrap have increased by JPY 500/mt week on week to JPY 40,000/mt ($270/mt), up by $1/mt. The FOB-based export price remains at JPY 41,000/mt ($277/mt) for the grade in question, up by $2/mt week on week.
South Korean steel producers have started to buy Japanese scrap once again, with POSCO leading the way. The producer has announced bids for Japanese scrap this week once more at higher price levels.
POSCO has increased its bids for Japanese HS grade scrap by JPY 1,000/mt to JPY 49,000/mt ($331/mt) CFR, up by $5/mt week on week.