Over the past week, Turkey’s import scrap market has been relatively quiet, with some ex-Europe cargoes changing hands and indicating a very slight decrease in price. Turkish mills are still in no rush to conclude bookings for deep sea scrap cargoes since they are very close to completing their purchases for December shipment. Scrap flow to export yards on both sides of the Atlantic Ocean continues to be slow, supporting sellers in maintaining their offer prices. As a result, prices for prime HMS I/II 80:20 scrap have decreased only by 0.3 percent or $1.5/mt week on week and are standing at $488-500/mt CFR Turkey. The European Commission's proposal of a tighter set of rules for waste shipments was well received in Turkey as it announced that it is not planning a ban on scrap exports to OECD countries.
In the US, scrap market sources throughout the country say they believe there is “no downside” heading into December. A possible rise of $20-$30/gt for secondary grades, and sideways to up $10/gt for prime grades are mostly voiced as the expectations for the December-buy cycle in the local US market. Scrap inflow to mills is decent in the US, SteelOrbis understands. The December scrap trade is expected to start in approximately 14 days’ time. Additional clarity on the market is expected to come next week.
As the pressure on Japanese scrap continues, South Korean producer Hyundai Steel has cuts its bids again this week. Hyundai Steel has reduced its bid for H2 grade by JPY 2,000/mt ($17.4/mt) as compared to the levels announced on November 5, to JPY 49,500/mt ($431/mt) FOB. This price is down JPY 1,000/mt ($9/mt) from the latest deal price level seen in S. Korea late last week. Hyundai has booked a little less than 30,000 mt of Japanese H2 grade scrap at this level, but SteelOrbis has learned that the producer had to reject some tonnages offered at this level, and so Japanese scrap quotations are believed to have some more room to soften.
SteelOrbis has learned that a major Vietnamese blast furnace-based mill has concluded a deal for bulk HMS I/II 80:20 scrap at $540/mt CFR with a US seller, though the material could be shipped from the Australian yards of the seller. This price is in line with the offers Vietnamese buyers received from the US at the end of last week. Japanese bulk H2 grade scrap offers are standing at $500-515/mt CFR, significantly lower as compared to the offers recorded two weeks ago at $520-525/mt CFR. But if last week the tradable level was at $510-515/mt CFR, now Vietnamese buyers are targeting $480/mt CFR and below for this grade, SteelOrbis understands. Market players in Vietnam have maintained a cautious stance as most Asian countries are affected by China, which is causing finished steel prices to move down significantly.
In the current week, import scrap prices in Taiwan have once again decreased, while sources think they have hit bottom for now. Offers for ex-US HMS I/II 80:20 scrap in containers to Taiwan are at $452/mt CFR as compared to levels of $465/mt CFR last week. Meanwhile, offers from Japan to Taiwan for H1/2 50:50 scrap by bulk have also moved down, from $490/mt CFR to $480/mt CFR week on week. “I think we have hit the bottom in terms of prices,” a source stated, adding, “Prices are considered to be very low.”
Indian imported scrap prices were triggering higher buying interest from local secondary mills, but actual deals were limited by sellers shifting the focus of offers to neighboring Pakistan, where price realizations were higher. The containerized shredded scrap price was at $550-555/mt CFR Nhava Sheva port in the west, slightly down by $2-3/mt from early November. However, according to the sources, despite the rise in buying interest from Indian secondary mills, sellers moved offers to Pakistan where prices were heard at higher levels at around $560-564/mt CFR Port Qasim. At least two other market participants pointed out the emergence of the faster rising trend of prices of import heavy melting scrap (HMS) I/II 80:20 compared to relative softening of import shredded scrap prices and the narrowing of the price difference between the two. They said that the ex-UK HMS I/II price was up to $530-540/mt CFR, compared to deals concluded at $510-520/mt CFR a week ago.
Import scrap activity in Pakistan has been muted, with most buyers holding back in anticipation of cheaper prices. While within the current week prices for shredded 211 scrap of European origin in containers have remained at $560-565/mt CFR, by the end of the period more and more UK suppliers have started to test the Pakistani market with offers at $555-557/mt CFR.
Lower bids from foreign customers have continued to exert pressure on the positions of Japan-based scrap suppliers, forcing the latter to accept lower prices in deals. However, as shipments to the domestic market at still higher levels have remained a solid option, Japanese scrap suppliers have not been in a hurry to book significant volumes. As a result, the SteelOrbis reference price for export H2 scrap from Japan has been settled at JPY 49,500-51,000/mt ($433-446/mt) FOB levels.
With the developments seen in the global steel and raw material markets in recent weeks, both suppliers and buyers of basic pig iron have become more cautious in trading as well as in voicing offers and bids in particular. The possibility of distressed cargoes from China has raised many concerns in the global basic pig iron market, with most traders already evaluating the consequences. No trading has been heard in the key markets lately, with with ex-CIS and ex-Brazil BPI prices thus remaining at $530-545/mt FOB Black Sea and at $500/mt FOB, respectively.