Over the past week, Turkey was quiet in terms of import scrap bookings. Turkish mills are still trying to get a grasp of the future trend of their finished steel sales, as particularly the rebar segment is not promising. “Even though we are receiving demand from northern European countries, the tonnages observed until now are not that great,” an official at one Turkish mill commented. Turkey is very close to completing its scrap purchases for April shipments and has to conclude a lot of deep sea transactions for May shipments. “Anytime now, we can see Turkish mills returning to the market. If we do not see a radical development to disrupt production, prices have room to go up,” a seller stated. US suppliers are out of Turkey’s import scrap market since they are unwilling to close deals at Turkish mills’ desired price levels. Meanwhile, the local Turkish rebar market is also recovering as most traders believe that prices are set to go up, while the discounts from traders have ended recently. “Cold weather conditions have continued longer than usual this year, and so there is delayed demand that we expect to return in the coming weeks,” a trader commented. Under the current conditions, the benchmark HMS I/II 80:20 scrap in CFR terms has recorded a 0.38 percent rise week on week. The month-on-month change is now at 30.43 percent in the deep sea segment, with prices being in the range of $651-665/mt CFR.
US domestic scrap prices have surged sharply during this month’s buy cycle, sources note, adding that the “uptrend is far from over.” “Russia’s invasion of Ukraine is still wreaking havoc on the global supply chain,” a source said. “Even if that conflict is resolved by the end of the week, which no one thinks is going to happen, I suspect the effects of this war are going to be felt globally for the rest of the year.” There are several factors to support the anticipated uptrend in the local US scrap market, while some believe that prices for HMS, P&S and shredded scrap “will go up anywhere from $50-100/gt next month,” and the price expectation for prime grade scrap is far from agreed upon. Whereas conservative predictions put prime grades at up $100-150/gt in April, other sources think that they could spike by as much as $200/gt once the market is settled.
The local German scrap market has surged upwards in March, despite the production halts announced by a few mills which have been resisting the hikes in energy prices. The increases were the result of the uptrend observed in the international steel market after Russia’s invasion of Ukraine. “Looking at scrap export prices to Turkey, we now see that domestic scrap prices are similar to export prices,” a German source said, pointing out that local scrap quotations have been slightly higher than export prices for some time now. “If we did not have commitments to local mills, we would be sending all our material for export,” a scrap collector commented. Another contact stated that domestic scrap flow in Germany is slow, adding, “This will surely push prices up in April.” The inland freight charges in Germany have increased by €5/mt over the month of March amid higher energy and oil prices. In the first 20 days of March, local scrap prices in Germany moved up by €65.5-120.5/mt month on month. Additionally, the year-on-year increase is still significant, in the range of €110.9-196.4/mt.
Similar to other countries in Europe, the local Polish scrap market has indicated a sharp increase over the course of March. “The rise in the international scrap market after Russia’s invasion of Ukraine has impacted the market, as well as the lack of some raw materials such as iron ore, pig iron and ferroalloys,” a Polish contact stated. During the past month, prices in the local Polish market for HMS I scrap have moved up by €90-100/mt to the range of €550/mt DAP, from levels of €450-460/mt DAP. Higher grades like E6 scrap and rails are currently at around $700/mt ex-works.
Domestic scrap prices have increased significantly in the Italian market since early March, reflecting the consequences of the Russia-Ukraine conflict and surging energy costs across Europe. However, local mills have succeeded in slowing down the uptrend a little by temporarily halting or reducing their production, several sources told SteelOrbis. “Prices have increased more significantly in Turkey and also in EU markets such as France and Germany. The difference between scrap prices in Italy and in other European countries is €30-60/mt,” one trader commented. What is certain is that local scrap suppliers have very different price ideas compared to mills and, although scrap prices are going up, this has happened slowly so far.
Having increased its local scrap procurement prices by a total of $51-60/mt in its announcements since March 9, the main EAF-based steel producer in Japan, Tokyo Steel, continued to raise its scrap procurement prices. On March 23, the company announced another increase in purchase prices for H2 and shindachi scrap for all its plants by JPY 1,000/mt. Tokyo Steel’s new price levels for H2 scrap are now in the range of JPY 63,000-64,000/mt ($521-529/mt), while for shindachi scrap they are at JPY 65,500-69,000/mt ($541-571/mt). All prices are delivered and effective from March 24. Amid the depreciation of the Japanese yen against the US dollar, the increases in prices on yen basis have only resulted in a $1/mt rise in dollar-based prices.
South Korean mills have increased their bids for higher grades of Japanese scrap. Since pig iron exports from Russia are limited amid the ongoing war in Ukraine, Asian buyers are seeking larger tonnages of higher scrap grades and prices are going up accordingly. Meanwhile, a South Korean source stated that sentiment in South Korea’s import scrap market is mixed. “Some believe that import scrap prices will move down from the current levels since finished steel demand is not so strong and steel quotations do not support current scrap prices,” the source commented, adding, “However, some believe there is still some room for a further increase.” It is learned that Hyundai Steel has bought 30,000 mt of A3 grade scrap from Russia at $620/mt CFR. An offer from the US West Coast to South Korea for HMS I is at $655/mt CFR, though SteelOrbis has learned that one of South Korea’s major steel producers has not accepted this level. South Korean producer POSCO has raised its bids for Japanese HS scrap to JPY 74,000/mt ($612/mt) CFR, JPY 3,500/mt ($29/mt) higher than its previous bid announced on February 18. POSCO’s bids for shredded have increased by JPY 5,000/mt ($41/mt) since February 18 to JPY 72,000/mt ($595/mt) on CFR basis. Meanwhile, SeAh Steel’s bids for shindachi bara grade are at JPY 75,700/mt ($626/mt) CFR or JPY 72,000/mt ($595/mt) FOB. As compared to the levels announced on March 17, Hyundai Steel has raised its bid for H2 grade by JPY 1,500/mt ($12/mt) to JPY 65,000/mt ($534/mt) FOB. As a result, the SteelOrbis reference price for ex-Japan H2 scrap is now at JPY 65,000-66,000/mt ($534-542/mt) FOB, increasing by an average of JPY 1,000/mt week on week, decreasing $1/mt amid the depreciation of the Japanese yen against the US dollar.
Some reductions have been recorded in Vietnamese mills’ import scrap procurement prices over the past week. Offers from the US are still considered to be high, while Japanese suppliers are now offering slightly lower quotations since the exchange rate gives them some freedom. On the other hand, Vietnam is still checking some alternative sources, such as containerized material or scrap of Australian and Hong Kong origin. Offers for ex-US HMS I/II 80:20 to Vietnam are at $665-670/mt CFR, indicating a $25-30/mt decline over the past two weeks. Similarly, Australian HMS I/II 80:20 scrap offers to Vietnam are at around $640/mt CFR. Offers from Japan to Vietnam for H2 grades are currently at around $610-620/mt CFR, indicating a $5-10/mt decrease week on week. SteelOrbis has learned that there were ex-Hong Kong deals for HMS I/II 50:50 scrap at $605/mt CFR this week.
During the past week, Taiwanese buyers have received close to zero ex-US scrap offers but instead seized on offers from Canada and Australia. “US-based suppliers have alternative destinations for sales,” a Taiwanese mill commented, adding, “They prefer to sell to countries such as Vietnam and South Korea, so they have practically disappeared from the Taiwanese market.” Meanwhile, Japanese scrap offers were given to Taiwan in a wide range, though in deals it is observed that ex-Japan prices have moved down. There were deals done from Canada and Australia for HMS I/II 80:20 scrap in containers in Taiwan at $560s/mt CFR, which are below the $575-577/mt levels observed from the US last week. Japanese H1/2 50:50 scrap by bulk has been offered to Taiwan in a wide range of $595-615/mt, as compared to the $600-620/mt CFR range last week. SteelOrbis has also learned that there are some deals concluded from Japan at $595/mt CFR.
Pakistani scrap buyers have remained inactive this week amid still slow domestic demand in the construction sector, despite a slight drop in import scrap offer prices coupled with the approach of Ramadan. Specifically, within the past week, import offers of ex-UK/EU scrap in containers to Pakistan have fallen to $635-640/mt CFR, compared to $640-645/mt CFR last week. Accordingly, a deal for approximately 2,000 mt of shredded scrap was signed at $642/mt CFR at the beginning of the week. Besides, another small cargo for around 500 mt has been booked at $639/mt CFR. Besides, the currency devaluation in Pakistan which has increased almost all costs and the liquidity issue seen during past weeks have affected the market. In particular, this week, the Pakistani rupee has plunged to a record low of around PKR 181.7 against the US dollar, compared to PKR 176.5 to the dollar last month.
In Bangladesh, demand for containerized import scrap has improved this week and higher prices have been achieved in some deals. Accordingly, several cargoes for ex-Malaysia and ex-UK busheling scrap in containers have reportedly been sold at $665/mt CFR this week, up by around $10/mt week on week. Besides, a supplier from Malaysia has sold a cargo for around 4,000 mt of PNS scrap at $660/mt CFR. Meanwhile, offers for ex-Canada PNS scrap have been voiced at around 654/mt CFR, up by $10/mt over the past week. Furthermore, a deal for around 4,000 mt of HMS grade scrap from South Africa has been signed at $630/mt CFR. Several deals for ex-Brazil HMS I/II 80:20 scrap have been reported at $625-640/mt CFR, compared to last week’s sales of the same grade at $620-625/mt CFR. Another deal for ex-Chile HMS I/II 90:10 scrap has been heard at $625/mt CFR, the same as last week. Meanwhile, the bulk scrap segment has been quiet as offers have been too high for customers. Thus, no bookings have been heard in the bulk scrap segment. Offers from US sellers for HMS I/II 80:20 scrap by bulk to Bangladesh have been reported at not below $700/mt CFR and buyers have been reluctant to sign new deals.
