As July comes near to an end, Turkey's import scrap prices continue to remain firm. Some scrap deals from last week indicated that buyers and sellers have agreed on current price levels. There is a common view in the market that deep sea scrap prices are not expected to move down to previous levels in the short term, though sources are still trying to understand the limit of the recent uptrend.
Deals done this week were all in the accepted ranges. An ex-Finland deal by a producer in Turkey's Black Sea side has been closed at $375/mt CFR, while SteelOrbis' reference prices for ex-Baltic HMS I/II 80:20 scrap stands at $374-376/mt CFR. An ex-Belgium deal was rumored to have been done by an Iskenderun-based producer at $368/mt CFR, while an ex-Germany deal was at $370/mt CFR, both for HMS I/II 80:20 scrap. SteelOrbis reference prices for ex-UK/EU scrap remain at $368-370/mt CFR.
Sources report that Turkey's interest for deep sea scrap is lively as mills started to buy cargoes to be shipped in September. Only one mill is known to have finished its procurements for this term. A slow uptrend in prices is possible, though this room is still limited against the backdrop of slow steel sales. US local scrap prices are expected to remain stable during August buy-cycle, while European sellers report scrap flow to their export yards is slowing down due to seasonal reasons. Turkish longs producers remain in a rather tough business situation, with their rebar sales being quite low. Their exports are still mainly slow despite some renewed activity by buyers from Latin America, Yemen and the Balkan region. In the domestic rebar market, the previous attempts to pass on the rise in import scrap prices have failed, with trade remaining limited and with workable prices basically rolling back to the earlier levels. As regards exports, the situation is additionally aggravated by the competition with North Africa, while in the domestic market the Turkish lira's depreciation and the overall difficult financial environment are still affecting daily business activities. Turkey's billet import prices remain in the range of $490-515/mt CFR, some concerns regarding further restrictions on supply from Black Sea and Azov Sea ports due to the current war-related disruptions caused Turkish mills to focus on locally produced billet this week.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have remained stable week on week. The prices are now 1.98 percent lower month on month in the deep sea segment, with prices being in the range of $368-376/mt CFR.
Ferrous scrap prices for the US domestic market in August could move similarly as they did in July. The overall consensus is that another month of stability will prevail, with scrap demand still substantial as the steel sector maintains high production levels. Yet some abundance in select grades could lower their prices again. Specifically, contacts in the Midwestern and Southern regions believe a drop of $10/gt for shredded and HMS I could coalesce while all other grades could remain sideways; essentially, the same trend in July.
Containerized ferrous scrap prices for the US West Coast (USWC) export market remained unchanged for another week and actually increased in some deals in the higher end of the price range. HMS I/II 80:20 was sold in some deals at $310/mt FAS Long Beach port, leaving the price range at $305-310/mt FAS. Last week it stood at $305/mt FAS. Contacts in USWC are more confident now that the market has reached bottom, even though some market factors are still unclear.
Containerized ferrous scrap prices for the export market in the US East Coast (USEC) increased by $10/mt on Tuesday as the export market to Turkey in the region hit bottom and has begun climbing back up. At the same time, bulk scrap prices to the export market remain sideways for cuts, yet have increased in some markets for shredder feed. USEC exporters are reportedly waiting to see if the improved trend in Turkish import prices will be long-sustainable before they make price movements when it comes to their inflows to their export yards.
Mexican ferrous scrap prices for the domestic market continued to decrease on Friday as mills' inventories remain healthy and some are expected to come back to the market in August. Slight decreases in some obsolete grades in the US in the range of $10/gt (and no improvement in prime grades) have helped Mexico's mills continue to drop prices.
In Bajio, scrap prices were also unchanged on all grades. The price of #1 busheling was flat at MXN6,700/mt ($383/mt) delivered consumer, while HMS I prices fell by MXN100/mt ($5.7/mt) to MXN6,000/mt ($343/mt) delivered, and P&S 5ft decreased by MXN200/mt ($11.4/mt) to MXN6,200/mt ($355/mt). Shredded prices contracted by MXN100/mt ($5.7/mt) to MXN7,300/mt ($418/mt) delivered, and MST also dropped by MXN100/mt ($5.7/mt) to MXN5,200/mt ($297/mt) delivered.
The Italian scrap market has continued to slow down this week. Market players are preparing for the summer holidays and remain in wait-and-see mode, limiting trading activity.
As for prices, however, the idea that the price declines in the scrap market - both locally and for imports - have come to an end is gaining ground. Accordingly, no changes have been recorded in the scrap prices reported by SteelOrbis for the Italian market, which remain stable at the previous levels.
At the end of July, local scrap prices in the Polish market have shown signs of decline. According to the latest data published by IPHGZ, the average scrap purchase price for delivery to yards in July has reached PLN 1,047/mt (approx. €242/mt) for W2 scrap (equivalent to HMS I) and PLN 1,091/mt (approx. €252/mt) for W7 scrap (equivalent to bonus), respectively down by PLN 76/mt (€17.57/mt) and PLN 74/mt (€17.10/mt) compared to June.
Even HMS I scrap collection prices have been lowered by around €20/mt compared to the previous level, now standing at €260/mt DAP.
The leading Japanese EAF-based steel producer Tokyo Steel has cut its local scrap procurement prices for the seventh time since the beginning of July. Tokyo Steel's first cut was on July 28, the second cut this week was July 29, the total drop being JPY 500/mt on the lower end and by JPY 1,000/mt on the upper end.
Currently, Tokyo Steel's general price range for H2 grade stands at JPY 50,500-53,000/mt ($309-324/mt) depending on the mill.
Taiwan's import scrap buyers are exerting further pressure on ex-Japan offers following cuts in local scrap procurement prices by Japanese EAF producers led by Tokyo Steel. While there is still downward potential for Japanese bulk scrap, ex-US scrap prices continue to remain firm this week amid ongoing turmoil in the US-Israel-Iran war.
Offer prices for ex-US HMS I/II (80:20) scrap in containers to Taiwan have moved from the $330/mt CFR recorded last week to closer to previous levels at $329-332/mt CFR. Offers for Japanese bulk H1/2 (50:50) scrap to Taiwan are at $350-358/mt CFR, with the average declining from the only offer shared last week at $355/mt CFR.
Vietnam's import scrap buyers are showing interest in declining ex-Japan offers, while they are staying away from ex-US scrap offers. Meanwhile, several Vietnamese mills have increased their steel prices this week, citing higher billet, raw material and oil prices.
Offers from the US West Coast to Vietnam for bulk HMS I/II 80:20 scrap have declined to $370-380/mt CFR this week from the $380/mt CFR recorded last week. Deals for ex-Japan H2 scrap have been concluded by Vietnamese buyers at $360/mt CFR, with the workable level declining by $2.5/mt on average since last week.
Pakistan's import scrap market has strengthened considerably over the past week, with buying activity accelerating and freight rates increasing together with war-risk premiums for shipments from Europe. Several fresh bookings have been concluded well above last week's levels, while expectations surrounding the forthcoming notification on the new tax mechanism have encouraged mills to secure additional imported material.
Accordingly, the latest reference price for import shredded scrap in Pakistan have increased by $10-12/mt over the past week to $415-420/mt CFR Qasim, versus the $403-410/mt CFR Qasim range reported in the previous week. The latest price increase has been supported by costlier shipping conditions and renewed inventory replenishment by Pakistani mills, amid persistent uncertainty affecting regional trade routes. Meanwhile, ex-UAE material has returned to the Pakistani market, with 500 mt of ex-Dubai sheared HMS I/II 80:20 sold at $410/mt CFR Qasim.
In Pakistan's domestic market, demand for good-quality scrap has improved, although overall activity has continued to be restricted by the monsoon season. Although prices have remained firm for now, the market could come under pressure unless steel demand starts to recover.
Bangladesh's import scrap market has registered a modest improvement in sentiment over the past week, though purchasing activity has remained limited as mills have continued to buy selectively and mainly on a hand-to-mouth basis. European containerized shredded scrap prices have remained stable, while HMS offers have edged up compared to last week. Meanwhile, persistent bid-offer gaps have continued to restrict activity in the bulk segment.
More specifically, in the containerized segment, ex-EU shredded scrap have been offered at $400/mt CFR Chattogram this week, unchanged from last week, while ex-EU HMS I/II 80:20 scrap have been offered at $370/mt CFR Chattogram, up slightly from $366/mt CFR Chattogram in the previous week. As for ex-Australia material, shredded scrap have been offered at around $400/mt CFR Chattogram, with buyers' bids remaining closer to $390/mt CFR. In terms of other origins, Philippines-origin GI bundles have been booked at around $325/mt CFR Chattogram, while Thailand-origin NTP bundles have been sold at approximately $385/mt CFR Chattogram. In the bulk segment, ex-US West Coast HMS I/II 80:20 scrap have been indicated at $390-395/mt CFR Chattogram, while buyers' bids have remained at around $385/mt CFR on an HMS basis.
Meanwhile, Bangladesh's domestic steel market has remained weak, as continued monsoon rainfall has disrupted construction activity and kept finished steel demand subdued.
