Although Turkey’s import scrap market has recorded another significant decline over the past week in bookings done by mills, the sentiment in the market is now better as market players have started to think that the market is very close to the bottom. Turkish mills are in need of scrap for early June or mid-June shipments and they do not have much time if they want to buy for this delivery term. Meanwhile, the collection prices of suppliers are not providing additional support for a further decline in quotations. Under the current conditions, the benchmark HMS I/II 80:20 scrap in CFR terms recorded a 7.18 percent decrease week on week. The month-on-month decline is now 27.89 percent in the deep sea segment, with prices being in the range of $445-460$/mt CFR.
The downtrend in US domestic scrap prices is not yet over, sources say, noting that, while some predict that prices could fall by $20-30/gt next month, others think that down $40-50/gt is plausible. Ongoing downticks in pig iron prices, coupled with still-healthy scrap inflows into domestic yards, are among the factors placing downward pressure on the market. “Prices for everything - pig iron, scrap, steel, you name it - were driven up solely based on panic,” a source stated, adding, “The market overheated and now it’s time for the market to readjust.” Others, however, believe that “across the board” downward pricing is unlikely.
As anticipated last week, the main EAF-based steel producer in Japan, Tokyo Steel, announced another round of downward revisions in its local procurement scrap prices, with the total reaching JPY 3,000-3,500/mt. Tokyo Steel’s new price levels for H2 scrap have come to the range of JPY 58,000-59,500/mt ($449-460/mt) depending on the mill, with the highest level being for Utsunomiya Works. The Shindachi scrap prices of Tokyo Steel are at JPY 60,500-64,000/mt ($468-495/mt). All prices are delivered and effective from May 20.
As a result, the SteelOrbis reference price for ex-Japan H2 scrap has decreased also, by JPY 1,000/mt ($8/mt) to JPY 59,000-59,500/mt ($457-460/mt) FOB, which is JPY 2,500-3,000/mt below last week.
Import scrap offers to Vietnam are still on a declining trend, as demand in Asia is slowing down despite the lower offer prices provided by sellers. With South Korea and Taiwan almost out of the market, Japanese suppliers are finding it difficult to maintain their price levels for exports. SteelOrbis has learned that offers from Japan to Vietnam for bulk H2 grade scrap have decreased from the level of $530/mt CFR last week to $510-515/mt CFR. Meanwhile, offers for ex-US bulk HMS I/II 80:20 scrap in Vietnam are at $500-510/mt CFR, against $530/mt CFR recorded last week.
Taiwan’s import scrap market has continued to move down over the past week since demand for scrap will be on the low side in the summer season. Taiwanese mills will start their maintenance works in summer and electricity is more expensive during this time. As a result, they are in no rush to conclude import scrap purchases despite the lower offers they receive. Ex-US HMS I/II 80:20 scrap in containers are offered to Taiwan at $430-435/mt CFR this week, $15-20/mt lower than the deals done at $450/mt CFR last week. Meanwhile, Japanese H1/2 50:50 scrap by bulk has been offered to Taiwan at $460/mt, as compared to $500/mt CFR recorded last week. Despite the second $40/mt decline in Japanese offers, the current offer level is considered to be too high.