As anticipated by SteelOrbis, Turkey has successfully kept its import scrap purchase prices stable in the current week due to the lack of any support for a further price increase in the deep sea market.
Earlier this week, Turkish market players had voiced their belief that deep sea scrap prices had settled for the time being in the current range at the time, with most being cautious and voicing the range of $340-350/mt CFR Turkey. But it should be recalled that the highest price level recorded in May was $347/mt CFR Turkey. Unless steel demand recovers in the coming days and/or Turkey’s economy shows signs of a recovery, no upward push is expected for deep sea scrap prices in the coming period. Following the ex-Germany scrap booking to Turkey reported earlier this week at $343/mt CFR, an ex-US transaction done on May 27, also supported the idea that deep sea scrap prices in Turkey had now stabilized.
Meanwhile, collection prices for EU-based export yards have softened after moving up to €270/mt DAP. SteelOrbis confirms that some EU-based export yards have already cut their purchase prices by €5-10/mt to €260/mt CFR. The euro-US dollar exchange rate is also expected to impact Europe’s sales prices. While there are several available cargoes from the EU as of today, May 30, the offers shared with Turkish mills are at around $342/mt CFR. Only one offer for a stressed cargo showed a willingness to accept lower than this level. Additionally, ex-US scrap offers received by Turkish mills indicate that sellers are trying to keep their offers firm at around $345-347/mt CFR. However, the number of offers is rising and ahead of the holiday Turkish mills are more inclined to wait until after the holiday to exert some pressure on deep sea scrap prices. The Feast of Sacrifice holiday will start on June 6 and Turkish players will be back in the market on June 10. “Against the cheaper billet offers received from Asia and due to the high availability we are observing in the scrap supplier regions, I will not be surprised if deep sea scrap prices soften slightly when purchases for July shipments start,” a seller commented. A source at a Turkish mill said, “I think we may prefer billets instead of scrap for some time. Hence, Turkey’s deep sea scrap orders for July shipments may also remain lower than usual.” A third source noted, “It is very clear that deep sea scrap prices are soft. But we also see that the flow to export yards both in the US and the EU is slow. June will be a month of recalibrating between local and export demand and prices. There is no way the price is going up, but the decline may be limited.”
SteelOrbis’ expectation for the coming week is for a softening of deep sea scrap prices, considering there are still cargoes available to be shipped in June and a high number of offers shared with mills for July shipments from all the main supplier regions, also due to Turkish mills’ unwillingness to make hasty decisions ahead of the holiday.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have increased by 0.15 percent week on week. The prices are now 8.32 percent higher month on month in the deep sea segment, with prices being in the range of $343-347/mt CFR.
This week, the market expectation for US scrap is sideways to $10-20/gt less, as insiders report minimal new demand for finished steel even though scrap inventories remain solid. This week’s market outlook differs from that reported seven days earlier, when expectations for June were more mixed. The current sideways-to-lower forecast for next month comes amid expectations of increased demand for scrap starting in June, when more than 1.6 million tons of annual rebar production capacity will come online with the opening of three new rebar fabrication mills in the southern US.
Based on a sideways to $20/gt lower June scrap call, US Midwest prime busheling scrap, which fell by $30/gt in May, could settle at $415-440/gt ($422-447/mt), while shredded scrap, which fell by $40/gt in May, could settle at $355-360/gt ($361-366/mt). Ohio Valley P&S and HMS grades, which saw $40/gt price drops in May, could settle at $341-351/gt ($346-357/mt) and $305-325/gt ($310-330/mt), respectively.
The first rumors of movements for the June round of scrap purchases by mills indicate increases of about €10-15/mt in Germany. Scrap demand is growing in order to meet the apparent improvement in long steel demand. However, the overall sentiment seems to be rather negative. Local collection prices at export yards are standing now at around €260/mt DAP for HMS I/II 80:20 scrap.
Silence characterizes the local scrap market in Poland, but, according to some rumors - which could not be verified by the time of publication - collection prices at export yards stand at around €270/mt DAP for HMS I scrap.
Scrap prices in the local market in Spain are higher on average than those registered in the Italian market, where price increases in the order of €10-15/mt have already been recorded for all scrap grades, and traders expect further upticks of €5-10/mt to occur next week.
Import scrap prices in Taiwan have followed diverse trends this week. While the number of offers both from Japan and the US is on the low side, ex-US scrap prices have remained relatively stable , while ex-Japan scrap prices have declined.
Market sources report that the number of offers for ex-US HMS I/II (80:20) scrap in containers to Taiwan has declined once again this week, while prices have remained relatively stable at $302/mt CFR. However, actual deal prices have moved up by $4-7/mt from the $295-298/mt CFR range to $302-303/mt CFR. Japanese H1/2 (50:50) scrap bulk cargoes have been offered at $323/mt CFR Taiwan as compared to last week’s $326-328/mt CFR. Having been absent from the Japanese market since early April, Taiwanese producers bought their first cargoes from Japan in the range of $318-321/mt CFR.
Vietnam’s import scrap market has remained unchanged this week in terms of prices. Over the past week, offers for Japanese H2 scrap to Vietnam have remained stable at $325-330/mt CFR. Market sources report that the workable levels are still at around $325/mt CFR for H2 grade scrap. Ex-US bulk HMS I/II 80:20 scrap offers to Vietnam have also remained unchanged, at $345-350/mt CFR. Vietnam is showing little interest in ex-US scrap cargoes given the significant price gap between offers and bids.
Trade activity in Pakistan’s import scrap market has slowed ahead of the Eid holiday, with trading subdued amid holiday disruptions, logistical challenges, and high freight costs. Offers for ex-Europe/UK shredded scrap stand at $385-390/mt CFR, with bids up slightly to $380–382/mt CFR. Small deals have been confirmed at these levels. Ex-UAE shredded scrap offers have remained at $390–392/mt CFR, with HMS at $370–375/mt CFR. Market participants also said that some traders are now redirecting cargoes to India to avoid passing the added costs to Pakistani buyers. Locally, offers for scrap equivalent to shredded have been at PKR 135,000–140,000/mt ($477–494/mt) ex-warehouse, and rebar prices have remained flat at PKR 238,000–242,000/mt ($843–857/mt) ex-works.
Bangladesh’s import scrap market has remained sluggish this week as high freight costs, weak steel demand, and the approaching Eid holiday have weighed on sentiment. While domestic scrap trading has continued, importers have largely avoided major bookings amid ongoing economic uncertainty. Shredded scrap offers from the EU and Australia have remained stable at $380-385/mt CFR, with a 1,000 mt deal for Australian material done at $380/mt CFR. HMS I/II 80:20 from Australia has been offered at $350-355/mt CFR, following last week's deal at $352/mt CFR. PNS scrap from Hong Kong has remained at $390-395/mt CFR, though freight costs from Hong Kong have hit record highs. Ex-US HMS bulk scrap has been offered at around $355/mt CFR, while Australian HMS and shredded scrap have stood at $355/mt and $375/mt CFR, respectively. Mills in Chattogram are reported to have adequate inventories and have showed little urgency in restocking. Ongoing economic challenges, limited infrastructure activity, and cautious pre-budget sentiment have led to lower import interest, with some scrap volumes now being redirected to India. Market activity is expected to remain muted through mid-June due to the Eid holiday.