Earlier this week, Turkey’s import scrap market has moved up as anticipated by SteelOrbis. The sentiment in Turkey has recovered quickly in the current month as Turkish mills’ interest in scrap has gained momentum.
On May 8, the frequently asked question in Turkey’s import scrap market was whether the recent uptrend will be short-lived or otherwise. It was known that European sub-collectors are receiving bids from exporters in the range of €255-257/mt DAP, approximately €5/mt higher than last week. “Exporters realized that the scrap flow to yards is almost zero when prices decline below this level,” a German sub-collector said. On the other hand, the first indications coming out of the US local market were showing a drop of around $30-40/mt in May buy-cycle prices, depending on the grade. “With oil prices softening, flow to export yards may increase in the US, but this is not expected to create a surplus just yet for exporters,” one source told SteelOrbis.
The main problem continues to be Turkish producers’ steel sales. Turkish mills are trying to increase their rebar sales prices. As SteelOrbis reported yesterday, ex-Turkey rebar offers still vary at $540-550/mt FOB for late May shipment, stable week on week. According to sources, below $540/mt FOB does not seem workable under the current market conditions. Most international buyers are in wait-and-see mode waiting for the next EU rebar quota round which will begin on July 1. In the Turkish domestic rebar market, official offers have settled at $540-560/mt ex-works, depending on the region, also unchanged week on week, but workable levels have moved up by $10/mt in this period. “The latest price hike recorded in ex-US bookings is justified considering the latest rebar sales. We expect more deals to be closed before the week ends at around these levels,” a source at a major Turkish steelmaker said.
As of today, May 9, several deals done from various regions by Turkish mills show that both buyers and sellers are content with the current price levels, at least for the first round of deep sea scrap purchases done early May. European export yards’ collection prices are currently in the range of €255-260/mt DAP. “Remember, exporters were paying €310s/mt DAP not a long ago. Although their collection prices declined towards €230s/mt DAP during April, the tonnages they could get from the lower end were very small. So, their inventory costs have not declined significantly,” a source from the seller side added. While there are rumors of several available cargoes, mainly from the EU segment and all above $335/mt CFR, not that much of a demand is observed on the Turkish producers’ side. “Some producers concluded deals from the bottom, they are willing to accept some increases in prices, while others do not. Same goes for the sellers, the ones sold at the lower end of the previous round are looking for higher prices to reach a higher average, as others without sales can be happy with the current levels. Market still tries to find some assurance and balance,” a European scrap seller commented.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have increased by 3.38 percent week on week. The prices are now 10.04 percent lower month on month in the deep sea segment, with prices being in the range of $333-339/mt CFR.
US scrap prices for May delivery are expected to settle $20-40/gt ($20-41/mt) less than their April counterparts as a result of continued reports of plentiful inventory levels at local scrap yards, amid an expectation for reduced May demand from domestic steel producers, market insiders told SteelOrbis.
Market insiders claim May scrap contract negotiations could yield a “no-buy, limited buy, or reduced buy scenario" from many domestic mills during the ongoing monthly buy cycle.
“Lots of furnaces have been idled, and some mills are out of the scrap market for May,” commented one Midwest scrap insider reflecting on the lower price levels and limited demand expectations for May.
“Not much is really going on this month for May scrap because of low demand,” said another scrap insider. “We are hearing that one mill is looking at down $50/gt for May (shredded) scrap, but that’s just talk right now.”
In the US Midwest, May busheling scrap in the Ohio Valley is seen $20/gt less at $445-470/gt ($452-478/mt), while May shredded scrap could settle $40/gt ($41/mt) lower at $375-$380/gt ($381-386/mt). May HMS and P&S cut grades are seen on average $30/gt ($30/mt) less at $335-355/gt ($340-361/mt), and $371-381/gt ($377-387/mt) respectively, scrap insiders said.
As expected, local German scrap prices are marking deep declines in the new round of purchases in May. After April purchases were closed very early in the month, mills are now adjusting to the new market levels, with declines ranging between €30-40/mt.
Local Polish scrap prices began the negotiations for the new month with a downtrend. The low demand for exports and the excess of scrap in the local market might be some of the causes of the decline. Sources reported that a major local mill in Poland confirmed a decline of PLN 150/mt (around €35/mt) for May round of purchases, but there are talks about other mills also bidding at PLN 200/mt (€47/mt) lower levels compared to April. These bids, though, have not yet been accepted by the time of publication.
As for exports, local collection prices of HMS I scrap to export yards have been reported at around €245-250/mt DAP, down by €10-15/mt week on week.
This week, the Italian scrap market has been moving down compared to the previous levels recorded by SteelOrbis. However, according to a major Italian trader, "The worst is over, and I do not expect any further declines in the Italian scrap market". If many were worried that prices would decrease by €30-50/mt after the end of April and early May holidays, now the extent of these declines is estimated at around €20-30/mt.
The attitude of many Italian steel mills remains cautious. Scrap purchases are proceeding, a sign that steel demand is present, but only in small quantities.
Japanese scrap export Kanto tender was closed with another price decrease on May 9. Market sources report that the cargo will be shipped to Bangladesh and the total tonnage is 15,000 mt.
In the Kanto export tender, the highest bid was at JPY 42,389/mt FAS, JPY 899/mt lower than last month. The dollar-based prices have decreased from $298/mt to $291/mt FAS, including the changes in Japanese yen-US dollar exchange rate.
Taiwan’s import scrap prices have continued to move down this week but only from the upper end. Japanese suppliers are still out of the market. Market sources report that Taiwanese dollar has gained strength against the US dollar.
Offers for ex-US HMS I/II (80:20) scrap in containers to Taiwan have declined on the upper end by $2/mt to $285-293/mt. Actual deal prices have also moved down by the same margin to $285-288/mt CFR. Amid the consecutive holidays in Japan starting with the Labor Day, Japanese traders are still out of the market .
Following the holidays in Vietnam, the import scrap prices in the country stabilized. Market sources report that the lack of demand in the local Japanese scrap market is limiting Japanese sellers’ ability to push for higher levels to exports.
Over the past week, offers for Japanese H2 scrap to Vietnam have remained stable at $325-328/mt CFR. Over the past week, ex-US bulk HMS I/II 80:20 scrap offers to Vietnam have remained stable at $330-340/mt CFR.
Imported scrap prices in Pakistan remained largely unchanged this week, but trade activity stayed muted due to sluggish finished steel demand. Offers for ex-Europe shredded scrap in containers held at $368–372/mt CFR, while buyer interest stayed below $368/mt, with unconfirmed talk of deals around $360/mt CFR late last week. Local scrap prices equivalent to shredded remained steady at PKR 135,000/mt ($480/mt) ex-warehouse. Rebar prices also showed no change, with tradable levels for 10–12 mm grade 60 rebar at PKR 235,000–240,000/mt ($836–853/mt) ex-works. Market participants expect continued weakness in the near term, as mills face unsold inventories and bid-offer mismatches in the import segment. The outlook will depend heavily on global scrap trends, especially Turkish buying activity.
Bangladesh’s scrap market remained subdued this week, with small buyers still struggling to open letters of credit and operating below capacity. Bulk trade remained minimal, while containerized scrap offers were mostly stable, with occasional discounts. Ex-Australia shredded scrap was offered around $380/mt CFR, with a deal confirmed at $378/mt CFR. HMS I/II 80:20 from Australia held steady at $360/mt CFR. PNS scrap from Hong Kong was offered at $390–395/mt CFR, with deals concluded at those levels, supported by shorter transit times. In the bulk segment, Bangladeshi mills were cautious amid rising freight costs, weak rebar margins, and sluggish construction. Bulk HMS I/II 80:20 offers from the US West Coast stood at $372–375/mt CFR, slightly up week-on-week, though buying interest remained limited.