Despite the softening observed early this week, Turkey’s import scrap market has recovered at the end of the week. Market players report that Turkish mills were more silent this week as compared to the past couple of weeks. “Since they bought several deep sea cargoes in succession last week, we can say their appetite has been satisfied somewhat for now,” a European scrap supplier commented.
At the end of the week, Turkey’s focus today was the interest rates announced by the Central Bank of the Republic of Turkey (CBRT). As SteelOrbis mentioned yesterday, the highest increase was expected to be 250 base points, but CBTR decided to increase them by 750 base points and shocked the market. Turkish lira has gained 5.36 percent of its value back in mere hours and the TRY-US dollar exchange rate decreased to 25.74 to a dollar. Amid the current circumstances, trading has almost stopped in Turkey, with market players evaluating their next move. A Baltic scrap supplier commented that “Today (August 24), no one will sell or buy anything.” Another market player said, “This was not a gradual rise, significantly higher than anticipated, hence we shall wait and see”.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved down by 0.47 percent week on week. The prices are now 5.56 percent higher month on month in the deep sea segment, with prices being in the range of $365-375/mt CFR.
Similar to last week, scrap market sources throughout the US believe that prices are likely to trend at sideways to slightly up during next month’s buy cycle, with shredded and P&S scrap holding level, and HMS ticking up slightly. Although scrap inflows have not been great, pending maintenance outages (coupled with smaller mill scrap buys) are expected to keep the market at “steady and unexciting.”
SteelOrbis has learned that the current price for Mexican domestic shredded scrap is now at MXN 5,150/mt ($293/mt), compared to MXN 5,000/mt ($288/mt) last week. Additionally, HMS I/II scrap prices are still being heard MXN 4,450/mt ($254/mt), compared to MXN 4,250/mt ($244/mt) last week.
In line with SteelOrbis’ expectations outlined in its previous report, domestic scrap prices in Germany have decreased further in August due to slower demand both in the local and export markets. For the coming month, many players believe that supply tightness will play a stronger role. “Collection prices across the board are not falling. It is not falling for us [sub-collectors], and it is not falling for the collectors in the streets amid ongoing inflation and the unofficial recession. People are unwilling to collect scrap from scratch if they are not paid enough,” a German sub-collector reported.
The leading Japanese EAF steel producer Tokyo Steel has increased its local scrap purchase prices by up to JPY 500-1,500/mt after a long pause. The steel producer’s previous price revision was on July 11, again upwards. The impact of rising international scrap prices has been felt in Japan after the holidays. Also, over the past three months, the gross domestic product (GDP) of Japan increased by six percent year on year. Tokyo Steel’s general range for H2 grade scrap has settled at JPY 48,000-51,000/mt ($329-350/mt) depending on the mill.
Import scrap prices in Taiwan continued to move up this week. Over the past week, offers for ex-US HMS I/II (80:20) scrap in containers to Taiwan were at $375-380/mt CFR. At the same time, Japanese scrap suppliers kept their offers for H1/2 (50:50) scrap by bulk to Taiwan at $380-390/mt CFR.
Trade activity in the import scrap market in Bangladesh has been lacking strength amid continued issues with opening letters of credit (LCs). In the containerized segment, offers for ex-UK/EU shredded scrap have remained unchanged at $440/mt CFR. Meanwhile, ex-UK PNS scrap offers have been heard at $455/mt CFR, same as last week, while the same materials from Hong Kong have been offered at $460/mt CFR, up by $10/mt week on week. Meanwhile, no fresh deals for scrap in bulk have been reported in Bangladesh this week, with the indicative offers for ex-US HMS grade scrap standing at around $410/mt CFR, same as last week.
In Pakistan, business activity has remained quite moderate as local Pakistani banks are still refusing to open letters of credit (LCs) for large volumes for most buyers. Besides, following an increase in import offers for scrap in Pakistan last week, most foreign suppliers have decided to continue raising prices, securing some volumes at higher prices this week. Specifically, several deals for ex-EU/UK shredded scrap have been signed at $435/mt CFR, up by $10/mt week on week, while some have already been reported at $437/mt CFR. Meanwhile, new offers for ex-EU/UK shredded scrap have reached $435-440/mt CFR, versus $435/mt CFR last week. Besides, more deals for ex-UAE scrap, for around 2,000-5,000 mt in total have been booked at $420/mt CFR this week, while new offers for ex-UAE shredded scrap have been voiced at $425-440/mt CFR.