Turkey’s import scrap market has been sluggish in terms of deep sea scrap deals in the current week as Turkish mills are trying to exert further pressure on prices, citing their insufficient finished steel sales. There is a delicate balance in the market, despite the slight downward revision observed in deals disclosed to the market. Some players from both the seller and buyer sides interpreted these decreases as relatively sideways movements. However, as of today, April 8, there are not many price inquiries from Turkish mills. Meanwhile, it is known that there are sellers seeking opportunities to sell to Turkey. With the local US scrap market underperforming as compared to expectations, the main question is whether they will manage to keep their prices for Turkey firm. It is also observed that collection prices in the EU are moving down, while some players have started to mention the risk of a price decrease for scrap of this origin. Under the current conditions, the benchmark HMS I/II 80:20 scrap in CFR terms has recorded a 0.23 percent decrease week on week. The month-on-month change is now down 0.15 percent in the deep sea segment, with prices being in the range of $640-653/mt CFR.
In mid-March, scrap market sources throughout the US were highly optimistic about the possible price trends for April. The sense of positivity was based on a variety of factors, including rising sheet steel prices, high pig iron prices, and rising cargo prices into Turkey. Yet toward the end of the month, sentiment, while still positive, was slightly less bullish, as cargo prices into Turkey appeared to reach an equilibrium. “This happened so quickly, but [I think] the best explanation that I see is that the increased scrap prices over the last couple months have led to very strong flows in most parts of the US,” a source said. “There was a lot of secondary scrap being offered.” Other sources said they believed that perhaps some mills “bought heavy” on pig iron last month, which led to a diminished need for prime grade scrap in April. A third source said that other factors, such as higher peddler prices, more favorable weather, and the fact that the docks “haven’t gone crazy raising their prices” may also be impacting the market. US Midwest scrap prices have settled as expected, sources note, at down $20/gt on HMS & P&S, at sideways on shredded, and at up $75/gt on busheling scrap. This month's settled prices are listed in the chart below.
Having already increased its local scrap procurement prices five times since March 9, the main EAF-based steel producer in Japan, Tokyo Steel, has continued to raise its scrap procurement prices further. On April 4, the company announced another increase, of JPY 500/mt in purchase prices for H2 and shindachi scrap for all its plants. Tokyo Steel’s new price levels for H2 scrap are now in the range of JPY 64,000-65,000/mt ($522-530/mt), while for shindachi scrap they are at JPY 66,500-70,000/mt ($543-571/mt). All prices are delivered and effective from April 5. On March 29, dollar-based quotations of Tokyo for H2 scrap were at $514-522/mt, while for shindachi scrap they were at $534-562/mt.
Following the long absence of ex-US scrap deals in South Korea, South Korean steelmaker Hyundai Steel has concluded a new deal from the US West Coast. SteelOrbis has learned that Hyundai Steel has bought 45,000 mt of HMS 1 scrap from the US at the price level of $625/mt CFR. The material is expected to arrive in South Korea in May, according to sources. Having concluded a deal from the US for HMS I at the beginning of the current week, South Korean steelmaker Hyundai Steel has kept its bids for Japanese scrap stable. Alternative sources have managed to sell to South Korea over the past week, first Russian scrap and then ex-US bookings were heard totaling 65,000 mt. As compared to the levels announced on March 31, Hyundai Steel has kept its bid for Japanese H2 grade stable JPY 66,000/mt ($537/mt) FOB.
It is observed that Vietnam’s import scrap market has remained quiet over the past week, particularly in the north of the country. “Vietnamese buyers have bought quite enough cargoes and local scrap flow is also good, and so they are in no rush to import scrap,” a Vietnamese source commented. SteelOrbis has learned that there is some demand from buyers based in southern Vietnam, particularly for containerized HMS I/II 80:20 scrap from the US at $570-575/mt CFR and shredded scrap at $615-620/mt CFR. As regards bulk HMS I/III 80:20 scrap, ex-US offers have moved down to an indicative level of $635-640/mt CFR. Offers from Japan to Vietnam for H2 grades are still at $620-630/mt CFR, stable since SteelOrbis’ report on April 1. On the other hand, Vietnamese buyers’ targeted levels for Japanese H2 grade scrap are in the range of $605-610/mt CFR. As a result, the SteelOrbis reference price for ex-Japan H2 scrap has remained unchanged week on week at JPY 66,000-67,000/mt ($537-545/mt) FOB.
The Taiwanese scrap market was quiet when April started with a holiday in the country. “The international scrap market is going down, particularly ex-US scrap offers are soft. Also, Japanese scrap quotations are stabilizing,” a source from a Taiwanese mill commented. Accordingly, Taiwanese buyers have focused on ex-US scrap which was out of the market for two weeks and have been trying to exert pressure on prices, testing the waters with lower bids for all origins. Offers for ex-US HMS I/II 80:20 scrap in containers in Taiwan decreased from $575-580/mt CFR earlier this week to $565-570/mt CFR, and market players report that deals were closed at $565/mt CFR. Meanwhile, HMS I/II 80:20 scrap from Australia is now slightly lower than ex-US material and is at $560/mt CFR fixed in deals. Japanese H1/2 50:50 scrap by bulk has been offered to Taiwan at $595-600/mt as compared to $600/mt CFR recorded last week. The bids from Taiwanese buyers are mostly around $590/mt CFR and below.
Following several deals for bulk scrap last week, the traditional slow month of Ramadan has kept Bangladesh scrap buyers cautious this week, owing to limited working hours and liquidity issues. In particular, two ex-US mixed bulk cargoes of shredded 211 scrap and HMS I/II 80:20 scrap were booked at the average price of $675/mt CFR Chittagong at the end of last week, for delivery in May, down by $5/mt week on week. Meanwhile, new ex-US bulk scrap offers are coming at $670/mt CFR, according to market insiders. In the containerized scrap segments the business activity was also rather slow this week, and some suppliers have even increased their offer prices to Bangladesh. Offers for ex-UK shredded scrap in containers have been reported at $675/mt CFR, compared to $670-680/mt CFR last week, while ex-UK PNS scrap has been offered at $680/mt CFR, the same as last week.
