Over the past week, Turkey’s import scrap market has recorded a sharp decrease. With this fall being higher than initial expectations, the first reaction in the market has come from the Turkish mills, which are testing sellers with lower bids. However, the sellers are unwilling to cut their prices further given their collection costs which do not leave much room for a decline. Hence, as of today, December 10, the Turkish scrap market signals a stabilization in terms of prices. As a result, benchmark HMS I/II 80:20 scrap quotations have recorded a decrease of $15/mt or 3.12 percent week on week and are currently at $460-471/mt CFR.
Pressure on Japanese scrap prices has continued to be observed over the past week, but Japan-based scrap sellers have started to show some resistance to buyers’ desires for further sharp cuts to prices, with the support they receive from their domestic market. The anticipated Kanto tender, which was expected to give a signal for the future trend of Japanese scrap prices, has failed to result in actual sales amid low bids. The Kanto Tetsugen scrap export tender was held on December 9, with its highest bids from traders at JPY 50,000/mt ($441/mt) FAS. The SteelOrbis reference price for export H2 scrap from Japan has remained at last week's level of JPY 47,500-49,500/mt ($418-436/mt) FOB.
During the past week, import scrap prices in Taiwan have softened further. Market players state that domestic finished steel demand is very slow all over the region, and so buyers are in no rush to conclude scrap purchases. Offers for ex-US HMS I/II 80:20 scrap in containers to Taiwan are at $452/mt CFR, $3-8/mt lower than in the deals recorded last week. Meanwhile, offers from Japan to Taiwan for H1/2 50:50 scrap by bulk have decreased from $490/mt CFR to $485/mt CFR over the past week. On the other hand, an ex-South America cargo consisting of just HMS I was bought by a Taiwanese producer at the level of $450/mt CFR.
South Korean mills are relaxed in terms of scrap imports amid their healthy inventory levels of scrap, slower rebar sales and maintenance works. “As finished steel demand in Asia is significantly slower nowadays, demand for scrap is also not that great,” a source commented. As compared to the levels announced on December 2, Hyundai Steel reduced its bid for H2 grade by JPY 500/mt ($4.4/mt) to JPY 47,000/mt ($413/mt) FOB. The producer’s bids for shredded scrap are now JPY 500/mt ($4.4/mt) lower as compared to December 2 at JPY 52,500/mt FOB ($461/mt). Additionally, this week, SeaAh Besteel’s bids for shindachi have been released at JPY 62,500/mt ($549/mt) CFR, JPY 1,500/mt ($13/mt) lower than last week. POSCO’s bids for Japanese shindachi press are at JPY 63,000/mt ($554/mt) CFR, which is JPY 1,000/mt ($8.7/mt) lower than SeaAh Besteel’s bids announced last week.
The further decline in import scrap offers was not big enough for Pakistani steelmakers to return to active bookings. Weak sentiments in the Turkish scrap market with the sharp price decrease in the latest bookings have continued to keep Pakistani buyers away from buying. In particular, most import offers of shredded 211 scrap of European origin in containers to Pakistan have been heard this week at $550-555/mt CFR Qasim, down $5/mt over the past week, while a little attention was paid even to offers under $550/mt CFR Qasim. Nevertheless, most major Pakistani rebar producers have increased their offers to the domestic market by PKR 2,000/mt ($11/mt) to PKR 197,000-198,000/mt ($1,108-1,114/mt) exw, citing the recent increase in electricity prices, unfavorable exchange rates and the shortage of scrap, in particular, among reasons.
