New scrap deals done this week in Turkey show that deep sea scrap prices are holding their firmness. Despite the mixed mood in Turkey, regarding the scrap prices or the steel demand, suppliers even managed to increase their quotations a bit.
As a result, deep sea scrap prices have remained strong, despite the lack of steel demand observed all over the Turkish market. No player in Turkey’s import scrap market expects an upward surge in deep sea scrap prices, but it is voiced largely by sellers that a bit of an upward movement is necessary to sustain the flow. Suppliers continue to add that Indian sub-continent is still active. A Turkish producer pointed out that “Shredded and bonus grade scrap in particular are hard to find. India’s biggest impact on scrap was the demand coming out of the country for higher grades.” A source said that traders’ reluctance to buy rebar is the result of the appreciation of the Turkish lira after the hike in Turkey’s interest rates. “But the Turkish lira will again lose strength, and traders will realize that scrap is remaining firm. So, they will eventually buy rebar at higher levels.” A rebar trader surveyed by SteelOrbis believes domestic rebar prices may have already hit the bottom. Others are more pessimistic. Therefore, despite the slow acceleration seen in the rebar market, no significant recovery with the support of abovementioned deals can be reported as of today, September 8.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved up by 0.68 percent week on week. The prices are now 4.63 percent higher month on month in the deep sea segment, with prices being in the range of $369-376/mt CFR.
Scrap market sources throughout the US said that the market thus far has been quiet. As of 2 p.m. on Thursday, September 7, mills had yet to announce September pricing. For the past 24 hours, rumors have been swirling that mills might try to take busheling prices down by roughly $20/gt to narrow the spread between busheling and shredded, although 100 percent of sellers polled said they would firmly push back. Rumors that mills may also try to take other grades down have also been rumbling through the marketplace. Mills are expected to come out with pricing by the end of business on Friday, September 8. Settled prices are not expected to emerge until early next week.
SteelOrbis has learned that the current price for Mexican domestic shredded scrap is now at MXN 5,650/mt ($326/mt), compared to MXN 5,350/mt ($311/mt) last week. Additionally, HMS I/II scrap prices are being heard at MXN 4,850/mt ($280/mt), compared to MXN 4,550/mt ($265/mt) last week.
Trading in the Vietnamese steel market has continued to be on the slow side over the past week. In general, the capacity utilization rates of Vietnamese mills are at around 30-50 percent, a source reported. The domestic scrap volume for higher grade scrap is not enough for Vietnam, and especially for the higher grades Vietnamese producers need to conclude deals for import scrap. US West Coast HMS I/II 80:20 offers for bulk cargoes are still coming to Vietnam in the range of $410-420/mt CFR. Meanwhile, ex-Japan H2 scrap offers are at $380-390/mt CFR.
Taiwan’s import scrap market has softened over the past week. According to sources, the declines observed for Japanese scrap were caused by the absence of Vietnam, South Korea and other Asian countries. Over the past week, offers for ex-US HMS I/II (80:20) scrap in containers to Taiwan have remained stable at $375-380/mt CFR. At the same time, Japanese scrap suppliers have cut their offers for H1/2 (50:50) scrap by bulk to Taiwan to $375-388/mt CFR.
Most scrap sellers have been bullish as regards Bangladesh due to the surge in bookings of shredded scrap in India and Pakistan. However, Bangladeshi buyers have kept resisting price hikes, keeping their bids stable. Most offers for shredded scrap in containers from the UK have been reported at $450/mt CFR, the same as last week, with a few sellers trying to go higher, offering at $455/mt CFR. Offers for ex-UK HMS I/II 80:20 scrap have remained unchanged at $420-425/mt CFR. Besides, according to sources, offers for HMS I/II 80:20 scrap from Australia have been voiced at $425/mt CFR, though no buyer has been ready to accept this offer. Thus, according to sources, the material has been booked at $418/mt CFR. Offers for ex-US HMS grade scrap in bulk have been voiced at around $425/mt CFR, the same as last week. However, according to sources, Bangladeshi customers have been bidding at $415/mt CFR. At the same time, market insiders reported a deal for 20,000 mt ex-Japan shindachi scrap - a Japanese grade of busheling scrap - signed in Bangladesh at $455/mt CFR.
In Pakistan, deal prices for scrap have increased slightly as most sellers have been refusing to provide additional discounts. More specifically, the deal price level for ex-UK/EU shredded scrap in containers has reached $438-440/mt CFR, up by $2-3/mt week on week. At least two deals for 1,000 mt each of ex-UK/EU shredded scrap have been confirmed by buyers at $438/mt CFR and $439/mt CFR, respectively, while, according to sources, in total around 5,000-8,000 mt of ex-UK/EU shredded scrap have been booked in Pakistan this week at $438-440/mt CFR.