Turkey’s import scrap market has been characterized by a firm trend over the current week, supported by the report of an ex-UK deal on December 29, which is said to have been closed at above $390/mt CFR.
SteelOrbis has heard that the ex-UK deal was done by an Iskenderun-based producer for HMS I/II 80:20 scrap at $396/mt CFR and bonus grade scrap at $416/mt CFR.
The lack of scrap is still the determining factor behind the price increase, with both sellers and buyers agreeing that scrap flow is on the low side. Since Turkey’s supplier regions are mostly on their Christmas holidays, collection activity is not expected to recover soon. Also, winter storms in the US are negatively impacting expectations for the region’s scrap availability in the future. A source at a Turkish steel mill said, “The current situation regarding scrap availability and mills’ scrap needs will not allow room to wait out the market to force a price reduction.”
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap in CFR terms has moved up by 4.43 percent week on week. The prices are now 12.82 percent higher month on month in the deep sea segment, with prices being in the range of $396-405/mt CFR.
The local German scrap market has followed diverse trends in December. E1 and E3 grades have increased month on month, while prices of other grades have declined slightly. According to a German source, the increase in E1 and E3 grades is a “surprise”. “These grades are in demand in export yards or go to shredders. I think the rise is related to the increase observed on the export side,” the source said.
Meanwhile, as SteelOrbis reported on December 20, EU energy ministers have reached an agreement on a gas price cap of €180 per megawatt-hour to “shield citizens from skyrocketing energy prices”. The regulation which will come into force on February 15, 2023, aims to limit episodes of excessive gas prices in the EU that do not reflect world market prices, while ensuring security of energy supply and the stability of financial markets. The price cap of €180 per megawatt-hour remains much below the earlier proposed cap of €275 per megawatt-hour.
According to the latest data provided by the BDSV, in the first 20 days of December scrap prices moved down by €1.3-4.7/mt month on month, except for E1 and E3 grades which increased by €20.6/mt or €4.3/mt respectively. Additionally, the year-on-year decrease is now in the range of €53.1-125.7/mt.
Major South Korean steel producer Hyundai Steel has cut its bids for Japanese scrap this week after booking more than 70,000 mt last week. It is observed that the new price level has also attracted the attention of the Japanese sellers. Some Japanese sources think that Hyundai Steel has booked another 70,000 mt this week, but SteelOrbis has also heard that the producer had to reject some tonnages amid the strong interest shown by sellers. The question of whether Japanese scrap prices would reach their peak has now been answered. South Korean producers had also been increasing their local scrap procurement prices in past weeks.
Hyundai Steel shared its bids for Japanese H2 scrap at JPY 49,000 ($366/mt) FOB on December 27, JPY 1,000/mt lower than the bids announced on December 20.
Hyundai Steel has also released bids for HMS 1/2 50:50 scrap at JPY 49,500/mt ($370/mt) FOB, while its bids for shindachi scrap are at JPY 52,000/mt ($389/mt) FOB and its bids for HS grade scrap are at JPY 53,000/mt ($397/mt) FOB.
Having picked up in previous weeks in terms of trading, Vietnam’s import scrap market is now silent since the supplier regions are on holiday.
Japanese H2 scrap offers to Vietnam are at $405-410/mt CFR, slightly lower than the deals closed at $410/mt CFR last week. With the freight rate being approximately $50/mt between Japan and Vietnam, this price translates to JPY 47,444-48,110/mt FOB.
The SteelOrbis reference prices for ex-Japan H2 scrap have decreased from JPY 50,000-50,400/mt ($377-380/mt) FOB to JPY 47,400-49,000/mt ($355-367/mt) FOB. The lower end of the prices is represented by the offers received by Vietnamese mills, while the upper end is now represented by Hyundai Steel’s bids.
In the current week, import scrap prices in Taiwan have continued their uptrend. The rise in the international scrap market is supporting the increase as well as lower scrap availability.
Deals for ex-US HMS I/II 80:20 scrap in containers to Taiwan have been in the range of $380-385/mt CFR this week.
Moreover, deals for Japanese H1/2 50:50 scrap by bulk to Taiwan have been closed slightly below $400/mt CFR in the current week.
In Pakistan, the import scrap market has been mostly silent this week with buyers reluctant to conclude deals while preferring to watch developments in the Turkish scrap market. At the same time, given the shortage of material, foreign suppliers of shredded scrap in containers, from the UK in particular, have started to test the market with new higher levels at $450-455/mt CFR, versus $440/mt CFR last week and up by $5/mt since the beginning of this week. However, such developments have made Pakistani buyers delay new bookings.
Business activity in the Bangladeshi scrap market has come to a standstill this week since the supplier regions are on holiday. At the same time, while most suppliers have increased their offers to buyers such as those in Pakistan and India, import scrap offers have remined stable in Bangladesh this week. Accordingly, indicative offers for ex-UK shredded scrap in containers have been voiced at $450/mt CFR, the same as last week. Meanwhile, no new offers for scrap in bulk have been reported this week, with the last offers for ex-US HMS I/II 80:20 scrap voiced at $435-440/mt CFR last week.
