The upward movement observed in Turkey’s import scrap market has continued over the past week. While it was known that Turkey needed cargoes for November shipment, the sustainability of the current levels is considered by market players to be debatable. In the middle of the week, sellers were aiming for higher levels on the back of current demand. There has been the positive impact of the agreements the United Auto Workers Union (UAW) signed during the past week, which will end the weeks-long strike against Detroit’s automakers. The negative news coming out of Europe regarding scrap flow is also another factor providing support for sellers.
Although the uptrend observed in the scrap segment was not supported by finished steel sales, Turkey’s import scrap market has regained the price levels recorded in early October, with the general price range for HMS I/II 80:20 scrap settling at $361-370/mt CFR Turkey.
Market players remain uncertain regarding this sharp increase in deep sea and short sea scrap prices. A European scrap supplier stated, “We have already reached $370s/mt CFR Turkey, now we need finished steel sales at higher price levels or else Turkish producers will not be ready to accept another rise in scrap prices.” A source at a Turkish producer seconded this, saying, “There should be silence after this round, a long one I presume, to see how the finished steel segment will perform.” A seller of scrap from the Baltic region and Europe in general said prices are moving up towards $375-380/mt CFR, while he admitted that the increase is sharper than initial expectations. A Turkish buyer said $375/mt CFR is not workable right now, citing the lower profit margins of mills. He added, “We [as Turkish producers] accepted higher levels because we decided to keep our production rates somewhat stable, but this does not mean there is a recovery in finished steel demand. We just did not want to miss the delivery term.”
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved up by 2.96 percent week on week. The prices are now 0.68 percent lower month on month in the deep sea segment, with prices being in the range of $361-370/mt CFR.
In the past several days, both General Motors and Stellantis have announced they have reached a tentative agreement with the United Auto Workers Union (UAW). Once these agreements are ratified by union members, the weeks-long strike against Detroit’s automakers will officially come to an end. Last week, sources were optimistic that news of UAW’s agreement with Ford Motor Company would have a positive impact on November scrap prices. And now that the strike against all three companies appears to be nearing an end, that optimism is growing.
SteelOrbis has learned that the current price for Mexican domestic shredded scrap is now at MXN 7,600/mt ($404/mt), compared to MXN 7,750/mt ($415/mt) a week ago. Additionally, HMS I/II scrap prices are heard at MXN 6,250/mt ($332/mt), compared to MXN 6,500/mt ($348/mt) last week.
Domestic scrap prices in Italy have remained in a wide range and relatively unchanged over the month of October. Market players report that finished steel demand in the country is sluggish, allowing no room for higher price levels.
Meanwhile, E3 grade scrap prices in France have remained in the range of €300-325/mt delivered in October.
The leading Japanese EAF-based steel producer Tokyo Steel has cut its local scrap purchase prices for all its plants, decreasing them for the first time in five months. Tokyo Steel’s general range for H2 grade scrap has declined by JPY 500/mt and is now at JPY 47,500-50,500/mt ($315-335/mt) depending on the plant.
With the support of the better rebar trading observed this week and due to the recovery in the international scrap market, Taiwan’s import scrap market has moved to a more stable and positive trend this week. Offers for ex-US HMS I/II (80:20) scrap in containers to Taiwan have remained stable over the past week at $359-360/mt CFR. Japanese scrap suppliers are sharing offers for H1/2 (50:50) scrap by bulk to Taiwan at $364-372/mt CFR.
Steel and scrap demand in Vietnam remain on the low side this week. Although import scrap prices have declined slightly over the past week, a Vietnamese source commented, “Not much has changed over this period. Demand in Vietnam is very weak and it is not following the international market.” This week, bids from Vietnam for containerized HMS I/II 80:20 scrap are at $365/mt CFR Vietnam. US West Coast HMS I/II 80:20 offers for bulk cargoes to Vietnam are at around $395/mt CFR. Offers coming out of Japan for H2 grade scrap are at $370/mt CFR, while no new deals have been heard over the past week. Tokyo Bay FAS-based prices for H2 grade scrap are at JPY 50,500/mt ($336/mt). This level shows that FOB prices are still at JPY 51,500/mt ($343/mt) for this grade.
SteelOrbis’ reference price for ex-Japan H2 scrap has moved down by JPY 500/mt on the upper end this week to JPY 49,000-51,500/mt ($327-344/mt) FOB.
Trade activity in the import scrap market in Bangladesh has remained moderate, with most deals heard for containerized scrap at slightly higher levels as compared to last week following the global price recovery. Several batches of around 2,000 in total of ex-EU shredded scrap in containers have been transacted at $416/mt CFR this week. Besides, another deal for ex-Australia shredded scrap has been reported at $415/mt CFR. The deal prices have gained $5/mt over the past week, while new offers have been heard at $420/mt CFR, up by $5/mt on the lower end of the range over the past week. As for bulk scrap, most offers have shown a slight rebound as well, with no fresh deals reported so far though. Offers for ex-US HMS grade and shredded scrap have increased by $5/mt week on week to $400/mt CFR and $405/mt CFR, respectively. Besides, offers for ex-Japan H2 scrap in bulk have settled at $400/mt CFR and at $420/mt CFR for HS grade.
In Pakistan, new offers for ex-EU/UK shredded scrap in containers have been voiced at $400-405/mt CFR, up by $5/mt over the past week. However, following several deals for around 3,500 mt of shredded scrap in total at $395-400/mt CFR at the end of last week, most customers’ bids have remained at the abovementioned levels this week. Meanwhile, trade activity in the import scrap market has continued to lack strength amid continuing issues with opening letters of credit (LCs).