At the beginning of the current week, Turkish import scrap market was characterised by a stable price trend fixed in deals. In mid-week it was observed that Turkish producers preferred for below $380s/mt CFR cargoes with smaller tonnages. However, the market has indicated a gradual price increase with the following deals.
While Turkish mills have continued to accept gradually higher price levels for deep sea scrap, finished steel demand in Turkey is still sluggish. Some market players think that the announcement of the Turkish ministerial cabinet may have a positive impact on demand, while others think June will be another silent month in terms of rebar demand because the market is saturated with inventory. Meanwhile, Turkish mills are showing signs of resistance to significant scrap price increases, citing the silence on the finished steel side.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap in CFR terms has increased by 0.92 percent week on week. The prices are now 2.16 percent lower month on month in the deep sea segment, with prices being in the range of $383-387/mt CFR.
Scrap market sources throughout the US have said that, while the June buy-cycle is unlikely to start until early next week, opinions as to where prices will settle remain largely mixed. For example, whereas some more optimistic players believe that HMS could trend at sideways to down $20/gt (with a small minority saying they believe that sideways could happen), others believe that down $20-30/gt for HMS and P&S is “largely in the bag.”
The downtrend of the local Italian scrap market has continued in the current week. With slower production rates, demand for scrap in the market is still sluggish. Generally, domestic scrap prices have decreased by €15/mt. Market players are pessimistic about the future trend in the local Italian scrap market.
With Taiwan’s three-month summer electricity supply cuts starting from June, factories will only be operating during night shifts. As a result, demand for domestic rebar and domestic or import scrap is low. Today, June 2, SteelOrbis has learned that offers declined further to $365/mt CFR, with deals done below $360/mt CFR and expectations moving down to $355/mt CFR for the short term. Japanese scrap suppliers’ offers for H1/2 50:50 scrap by bulk to Taiwan are below $375/mt CFR, but there are no bids from Taiwanese buyers. The workable levels for this grade are estimated to be at around $370/mt CFR.
Vietnam’s import scrap market is still characterised by slow activity. Market players report that many construction projects are frozen, while end-user demand for steel is on the low side. Offers from the US West Coast for bulk HMS I/II 80:20 scrap cargoes are at $395-400/mt CFR.
On June 1, Tokyo Bay FAS-based prices for H2 grade scrap were at JPY 47,000-47,500/mt ($338-342/mt). This new level signals JPY 48,000-48,500/mt ($345-349/mt) FOB for this grade.
As a result, the SteelOrbis reference prices for ex-Japan H2 scrap have increased by JPY 200/mt on the lower end to JPY 48,000-48,300/mt ($345-348/mt) FOB, with dollar-based reference prices moving up by $4/mt week on week. The lower end of the range is now represented by the Tokyo Bay prices.