Following the sharp increases observed in Turkey’s import scrap market since the recent earthquakes, silence has been observed in the market this week. While it is considered to be normal for the market to take a breather after a series of new bookings, it is also observed that the ideas of buyers and sellers have differed from each other. Turkish mills want to halt the significant price increases, though collection costs and the positive sentiment observed in some scrap supplying regions do not allow the sellers to cut their prices.
In Belgium and Amsterdam, collection prices have reached €380/mt delivered this week. Despite the increasing levels, flow to yards has not recovered. Moreover, scrap flow to sub-collectors is also lower than usual. According to sub-collectors SteelOrbis has interviewed, scrap flow has declined by 30-50 percent in the EU. Meanwhile, increasing flat steel quotations in the US are supporting the domestic scrap market. Market players believe that an increase of $30-50/mt is possible in the local US scrap market in March buying cycle. Still there is more room for scrap purchases for April shipments. Usually, Turkish producers need at least 10-15 days to successfully exert pressure on prices, but some Turkish mills admit there is not enough time for this in the coming period. Despite the Turkish government’s decision to cut natural gas prices by 21-26 percent for industrial usage, not much has changed in terms of mills’ production costs. “There are other costs that no one talks, such as financial costs. Also, we are not sure whether this price cut for natural gas is here to stay,” a source at a mill reported. While most market players think that there is no room for a price decline for scrap, the duration of the uptrend is unclear.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap in CFR terms has remained stable week on week. The prices are now 5.39 percent higher month on month in the deep sea segment, with prices being in the range of $440-450/mt CFR.
SteelOrbis has learned that the average price for dock delivered HMS I/II 80:20 scrap in Houston is being heard at approximately $350/gt against a range of $330-350/gt a week ago. The dock delivered price for P&S scrap in Philadelphia is trending at approximately $360-370/gt, against a range of $345-370/gt on February 8. The dock delivered price range for P&S scrap in New York is now being heard at approximately $355-370/gt, against $345-355/gt during the first week of February. SteelOrbis has also confirmed that the dock delivered price range for P&S scrap in Boston is now being heard at $320-335/gt.
SteelOrbis has learned that the current price for Mexican domestic shredded scrap is now at MXN 9,800/mt ($520/mt), compared to MXN 9,700/mt ($516/mt) last week.
Additionally, HMS I/II scrap prices are being heard at MXN 8,640/mt ($458/mt), against MXN 8,550/mt ($455/mt) last week.
The local Italian scrap market has not followed the general price trend observed across Europe as there is still reluctance observed in the long steel segment. While the main buyer of Italian construction steel is Germany, the slowdown in Germany’s construction activities has taken a toll on Italy. Some German players think that due to inflation construction is slower than usual but may recover a little in the coming weeks amid improving weather conditions. The rising import scrap quotations in Turkey may cause some stress in the local Italian scrap market, as suppliers may decide to export their tonnages against the more attractive figures coming out of Turkey. Average HMS (E3) scrap prices in Italy have been at €320-372/mt delivered.
While South Korean steelmaker Hyundai Steel has stayed away from the import scrap market this week, another major producer in the country, POSCO, has announced bids for higher grade Japanese scrap, indicating a $8/mt increase. However, SteelOrbis hears that Japanese suppliers are not in a hurry to sell, and that most of them will wait for the next Kanto Tender to be held on March 9.
SteelOrbis has learned that POSCO has shared a bid for Japanese HS grade scrap this week at JPY 59,000/mt ($433/mt) CFR or JPY 55,800 ($409/mt) FOB. The previous bid from Hyundai Steel for Japanese HS scrap was announced on February 22 at JPY 54,000/mt ($401/mt with the exchange rate at 134.77) FOB.
In the Vietnamese scrap market, the number of offers has increased, but Vietnamese buyers still state that they cannot accept higher levels. According to a Vietnamese source, “There is demand, but not as strong at the offered price of scrap, and so market is very quiet, with just a few deals done.”
A Vietnamese buyer concluded a deal for Japanese shredded scrap earlier this week at $460/mt CFR.
Offers to Vietnam for Japanese H2 grade scrap are at around $450/mt CFR, while ex-US HMS I/II 80:20 scrap is offered closer to $455/mt CFR.
As of today, March 3, Tokyo Bay FAS-based prices for H2 grade scrap have recovered back from the range of JPY 52,500-53,000/mt ($389-393/mt) to JPY 53,000-53,500/mt ($389-392/mt). This new level signals JPY 54,000-54,500/mt ($396-400/mt) FOB for this grade.
Despite the shorter work week in Taiwan due to the holidays on February 27-28, import scrap prices in Taiwan have increased during the week. The local rebar market in Taiwan is performing better, though market players believe that this is the result of the increasing international scrap market.
Some Taiwanese buyers have concluded deals for ex-US HMS I/II 80:20 scrap in containers at $420/mt CFR, increasing from the $410/mt CFR level recorded at the end of last week
Offers for Japanese H1/2 50:50 scrap by bulk to Taiwan are currently at $435-440/mt CFR, slightly higher as compared to $430-435/mt CFR last week.
In Bangladesh, this week market insiders have reported more deals for containerized scrap at higher levels as well as a fresh deal for ex-Australia bulk scrap, following a very long pause in bulk bookings. A deal for a mixed 30,000 mt ex-Australia scrap cargo has been booked this week at $498/mt CFR for bonus scrap, and at $488/mt CFR for HMS grade scrap. Meanwhile, according to sources, offers for ex-US HMS grade scrap in bulk have been reported at $495/mt CFR, up by $30-35/mt over the past week. Bangladeshi customers have also reported more deals for containerized scrap at higher prices. In particular, a deal for around 2,000 mt of ex-Brazil HMS I/II 80:20 scrap has been done at $465/mt CFR, while offers for ex-Brazil shredded scrap have settled at $505/mt CFR, up by $10/mt week on week. Besides, market insiders have reported more purchases for ex-UK and ex-Hong Kong PNS scrap at $505-510/mt CFR and some at $520/mt CFR level, up by around $10-20/mt week on week. At the same time, offers for ex-UK shredded scrap in containers have been voiced at $505-510/mt CFR, versus $485-490/mt CFR last week.
In Pakistan, new offers for shredded scrap have posted another increase this week, though most Pakistani buyers have remained inactive due to financial problems in the country and severe liquidity issues. In particular, offers for ex-UK shredded scrap in containers have settled at $485-490/mt CFR, versus $470-475/mt CFR last week. Meanwhile, some local rebar manufacturers have continued to announce the closing of all further sales of rebar given the severe shortage of raw materials, scrap in particular, due to problems with opening letters of credit (LCs). More specifically, one of the Pakistani rebar mills, Faizan Steel, officially closed all rebar sales, effective immediately from February 24. The date of the reopening of sales has not been announced yet.