Global View on Scrap: Turkish and Asian markets characterized by soft prices

Friday, 23 February 2024 16:47:05 (GMT+3)   |   Istanbul
       

Reports of three deep sea scrap bookings, all done last week, circulated in the Turkish market at the beginning of the week. The price in the relatively older ex-UK deal did not show much change. The ex-Baltic booking indicated a decent decline for the grade in question, though this fall had been anticipated. Ex-US scrap prices softened slightly in a deal done last Friday.

The negative sentiments in the European and US domestic scrap markets are a significant factor for Turkey’s future deep sea scrap prices. While local scrap prices in both regions are expected to soften in March, the depth of the fall is not yet clear. As Turkish mills have almost completed their purchases for March shipments, there is no rush on the buyers’ side. SteelOrbis hears there are sellers actively offering cargoes to Turkey for March shipments. However, buyers’ bids for HMS I/II 80:20 scrap are lower than the price ideas of sellers. In the meantime, scrap collection prices of European export yards have softened to €335/mt DAP. The main question in the market is whether deep sea scrap prices will move below the $400/mt CFR Turkey level or not. Most market players surveyed by SteelOrbis think it is not advantageous for either sellers or buyers to see a sharp decline in prices, though such a decline is a possibility. However, it is also observed that the domestic finished steel market in Turkey is sluggish, providing little support for the scrap segment. Rebar spot prices in some regions of Turkey have moved down this week, while Turkish rebar export prices have remained stable with no confirmed sales and the upper end is considered to be unworkable. The hot rolled coil market is stable without any big motivation for trade, while the billet segment is characterized by a soft trend.

Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved down by 0.73 percent week on week. The prices are now 1.56 percent lower month on month in the deep sea segment, with prices being in the range of $405-414/mt CFR. 

SteelOrbis has learned that the dock delivered price range for HMS I/II 80:20 scrap in New York is still being heard at approximately $315-$330/gt, reflecting no change since our last report 4 weeks ago. The dock delivered price range for HMS I/II 80:20 scrap in Boston is being heard at approximately $285-$310/gt.

SteelOrbis has learned that the current price for Mexican domestic shredded scrap is now at MXN 7,700/mt ($439/mt), compared to MXN 7,900/mt ($450/mt) a week ago. Additionally, HMS I/II scrap prices are now being heard at MXN 5,800/mt ($331/mt), compared to MXN 6,250/mt ($356/mt) last week.

Domestic scrap prices in Germany have increased slightly over the past month. The limited increase in local scrap prices was the result of low scrap flow in the EU against backdrop of the change of mood in the European flat steel market. Currently, European scrap collection prices are at around €335-340/mt DAP, €10-15/mt lower as compared to the levels recorded earlier this month. Market players think that warmer weather in the region may cause scrap supply to recover slightly in March.

Once more, local scrap prices in Italy have remained largely unchanged this week. Some producers have lowered their purchase prices for shredded and busheling by €5-10/mt on the grounds of poor sales of finished steel, especially rebar. Others, on the other hand, have accepted higher prices because, probably, according to one source, "they have not been buying for a while and had slightly lower prices to begin with. Now they need scrap and so have accepted the higher prices proposed."

However, market participants are uncertain about what the price trend will be in March. According to some traders, the earlier signs of weakness that could have indicated lower prices have been cancelled out, and the behaviour of steel mills this week suggests that there is room for improvement. Others are less optimistic and assume a stable or slightly declining market due to low demand and generally low finished steel outputs. The situation may become clearer next week.

The Spanish scrap market is also in the doldrums, with mills showing little interest in buying new cargoes due to low levels of finished steel production. Market participants expect demand to improve in March, though, as steel mills' outputs are expected to increase, according to sources. This could also reawaken their appetite for scrap imports, the volumes of which are currently at very low levels, as imports are about €10/mt more expensive than local scrap.

Taiwan’s import scrap market has declined further this week with offers softening. Market sources report that rebar sales in Taiwan have recommenced this week. Offers for ex-US HMS I/II (80:20) scrap in containers to Taiwan have moved down over the past week to $373-375/mt CFR. Japanese scrap suppliers’ offers for H1/2 (50:50) scrap by bulk to Taiwan have moved to $380-385/mt CFR.

Trade activity in the import scrap market in Pakistan has been moderate this week, with most deals reported with small discounts given the negative mood in Turkey’s import scrap market, coupled with the still slow demand recovery in Pakistan after the elections. Several deals for at least 3,000-5,000 mt in total of ex-EU shredded scrap are reported to have been signed at $437/mt CFR, $439/mt CFR and 443/mt CFR Qasim at the end of last week and the beginning of this week. Meanwhile, most offers for ex-UK shredded scrap in containers have been voiced at $440/mt CFR, against $440-445/mt CFR last week.

Bangladeshi buyers have been reporting yet further letter of credit (LC) problems, with most import offers remaining relatively unchanged over the past week. Offers for ex-EU HMS I/II 80:20 scrap have been voiced at $410-415/mt CFR, the same as last week. Meanwhile, several deals for ex-Australia HMS I/II 80:20 scrap for around 2,000 mt in total have been heard at $410-412/mt CFR. Furthermore, offers for shredded scrap in containers from Europe have been estimated at $435/mt CFR, the same as last week. According to sources, a deal for ex-Hong Kong PNS scrap has been reported at $445/mt CFR.


Tags: Scrap Raw Mat Europe 

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