Over the past week, sentiment in Turkey’s import scrap market has stabilized with deep sea deals closed at similar levels. For now, a supply-demand equilibrium has been reached with sellers not willing to cut prices, while Turkey is in no rush to conclude deep sea bookings. As a result, prices for prime HMS I/II 80:20 scrap have remained stable in the range of $491-500/mt CFR week on week. The most important development this week was the European Commission’s plan to impose a ban on scrap exports, which received different reactions, but mostly it was said that it cannot be settled in the short term and that a full ban for all grades is unlikely.
On the US side, it has been less than a week since November US scrap prices were settled, but sources close to SteelOrbis say they do not see any downside for December. The shortened collection period ahead of the holidays, slowing scrap flow and the unwillingness of sellers to conclude more sales amid tax concerns are the main reasons voiced by players for their expectations.
South Korean mills have reduced their bids sharply over the past week for Japanese scrap, while their local scrap market is also softening. As the local scrap flow is strengthening, some players state that South Korea’s need for import scrap is not as urgent as it was. It can easily be seen that Japanese scrap prices are losing significant strength in Asian markets. Hyundai Steel has bid for Russian A3 scrap at $515/mt CFR, so the tradable level for ex-US HMS I will hardly be above $525/mt CFR, down by $20/mt from last week. Bids for H2 scrap have been lowered to JPY 50,500/mt ($443/mt) FOB from JPY 51,500/mt FOB earlier this week.
With bearish sentiments towards the future price trend mounting, Tokyo Steel, the main EAF-based steel producer in Japan, has continued to lower its scrap purchase prices further. However, even after the second consecutive revision during the current week, local customers continue to provide significant support for Japan-based scrap suppliers, as their bid prices are noticeably stronger than foreign customers can accept.
The monthly Kanto Tetsugen scrap export tender has been cancelled this week, with the highest bid at JPY 52,200/mt ($461/mt) having been rejected due to the unattractiveness of the price. Meanwhile, by the end of the current week the SteelOrbis reference price for export H2 scrap from Japan has decreased by JPY 1,000/mt (around $9/mt) to JPY 50,500-53,000/mt ($443-465/mt) FOB. In particular, the lower end has been fixed in a deal to South Korea, while the higher end corresponds to the prices targeted by suppliers, but with no takers so far.
Scrap offers to Pakistan have continued to fluctuate this week. The resumed devaluation of the national currency has added to the pressure on the Pakistan-based customers, forcing them to be cautious as regards new bookings.
Following the latest ex-UK HMS I/II 80:20 bulk transaction to Bangladesh at $560/mt CFR, global scrap suppliers have been quick to target higher numbers in future bookings. Meanwhile, Bangladeshi rebar mills have continued to pass on their increased costs to end-users, voicing rebar offers at higher levels.