As Turkey continues to buy deep sea scrap cargoes, prices have indicated a gradual decline over the current week. Following the ex-EU and ex-US bookings, Baltic origin HMS I/II 80:20 scrap prices have also been revised downwards.
Another price hike in Turkey for industrial energy usage is expected in August. A source at one mill said that, if energy prices increase by 30 percent, the impact on costs will be roughly $16/mt, while if the hike is 50 percent, the impact will be around $25/mt. Under the current conditions, another rise in Turkish mills’ costs would mean lower competition in their traditional export markets where they barely make any sales. While some transactions were heard in the local Turkish rebar market this week, the total tonnage is estimated to be around 40,000 mt, with prices in the range of $550-560/mt ex-works. Exports are more limited. Due to the lack of steel demand, the sentiment regarding the future situation for the deep sea scrap prices and requirements of Turkey remains weak.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap in CFR terms has decreased by 0.99 percent week on week. The prices are now 7.92 percent lower month on month in the deep sea segment, with prices being in the range of $346-352/mt CFR.
The majority of scrap market sources throughout the US still say they believe that August scrap prices are likely to trend at sideways. Others, however, now believe the market may have a bit of upside to it. Several sources in the Midwest and Northeast have indicated that scrap inflows have slowed down substantially in the past several weeks, which they believe has the potential to support higher pricing.
SteelOrbis has learned that the current price for Mexican domestic shredded scrap is now at MXN 5,750/mt ($334/mt), compared to MXN 6,200/mt ($357/mt) on July 14. Additionally, HMS I/II scrap prices are being heard at MXN 4,950/mt ($287/mt), compared to MXN 5,650/mt ($325/mt) on July 14.
As anticipated by market players, domestic scrap prices in Germany have decreased further in July due to the slower demand both in local and export markets. The downward pressure on scrap prices has increased in the international market, with slower industrial activity in the EU pushing scrap prices down in July. According to the latest data provided by the BDSV, in the first 20 days of July, scrap prices moved down by €7.1-21.4/mt month on month.
As anticipated by market players, South Korean steel producer POSCO has cut its bids for Japanese shredded scrap. While the producer has now announced its fourth bids of the current month, the pressure on Japanese scrap is increasing. POSCO has shared bids for shredded scrap at JPY 55,000/mt ($392/mt) CFR or JPY 52,000/mt ($370/mt) FOB. POSCO’s bids for Japanese HS grade scrap are at JPY 56,000/mt ($399/mt) CFR.
Domestic rebar sales in Taiwan have been limited this week. Offers for ex-US HMS I/II (80:20) scrap in containers to Taiwan have been at $355-365/mt CFR. Japanese scrap suppliers have decreased their offers for H1/2 (50:50) scrap by bulk to Taiwan to $375-380/mt CFR.
Demand in the Vietnamese scrap market is still on the weak side. Some small-volume deals for HMS I/II 80:20 in containers have been reported at $365/mt CFR. US West Coast HMS I/II 80:20 offers for bulk cargoes have been at $390/mt CFR Vietnam. Deals for ex-Japan H2 scrap were done at $370/mt CFR and shindachi scrap has changed hands at $410/mt CFR.
As of July 27, Tokyo Bay FAS-based prices for H2 grade scrap were at JPY 49,500-51,000/mt ($354-365/mt). This level signals JPY 50,500-52,000/mt ($362-372/mt) FOB for this grade.
As a result, the SteelOrbis reference prices for ex-Japan H2 scrap have settled at JPY 47,000-51,000/mt ($337-365/mt) FOB.
Imports of scrap have been limited in Pakistan this week and prices have been under pressure from the poor situation in the rebar market and by mills being affected by the recent announcement of power tariff increases by 25 percent. The deal price level for ex-UK/Europe shredded scrap has settled at $404-408/mt CFR Qasim versus the tradable level of $405-410/mt CFR last week. On Sunday, the Pakistan Association of Large Steel Producers made an announcement that power tariffs will be increased by 25 percent, which may result in rebar price increases of PKR 8,000-11,000/mt ($29-40/mt) due to rising costs.
The situation in the import scrap market in Bangladesh has still been difficult this week with low demand and the problem regarding letters of credit (LCs) continuing. But while prices for container scrap have remained mainly stable over the past week, the indications for bulk scrap have fallen further and buyers have been more willing to negotiate at much lower levels. The tradable level for ex-US HMS I/II 80:20 scrap by bulk has softened by $15-20/mt over the past week to $380-385/mt CFR. And though offers from the US were as high as $410-415/mt CFR last week, market sources said that, if sellers want to push volumes, there is no other option but to cut prices to buyers’ price idea. The tradable level for shredded in bulk in Bangladesh has been at $385-390/mt CFR, while for P&S they have been at $390-395/mt CFR. In the container scrap segment, the workable level for shredded in containers has been assessed at $420-425/mt CFR, down by $5/mt over the past week, but offers have been rare and still mainly not below $425/mt CFR.