Having concluded several deep sea scrap bookings at significantly lower price levels during the SteelOrbis Spring 2022 Conference & 86th IREPAS Meeting held in Istanbul on May 29-31, Turkish mills are now asking for more reductions. Despite their efforts, uncertainty still prevails in Turkey’s import scrap market as suppliers and mills voice different expectations on a daily basis. It cannot be said that the sentiment is now more positive, but some suppliers are currently resisting lower price bids, particularly in the EU. A major European supplier commented, “There is a contraction and disruption of supply flow, while all buyer regions except Turkey are active in some way to buy scrap.” Another important European supplier stated, “There is an expectation of prices hitting the bottom once again, Turkish mills’ inventories are on the low side and, if they start booking next week as we anticipate, price can see a recovery.” On the other hand, the sluggish local finished steel market in Turkey is not helping Turkish mills as the new tax system hits all players’ finances and is slowing trade further as the Turkish lira continues to depreciate against the US dollar. It is widely known that, if Turkish mills finished steel sales do not recover, they will not need their traditional tonnages from the deep or short sea scrap segments. The impact of the latest increase in natural gas prices on industrial production in Turkey is vague right now, and Turkish mills are also trying to understand how much of an extra burden this new development will add to their production costs. The short sea segment is once again feeling downward pressure. A Bulgarian supplier stated that the workable levels for HMS I/II 80:20 scrap is standing in the range of $395-400/mt CFR Turkey. Under the current conditions, the benchmark HMS I/II 80:20 scrap price on CFR basis has recorded a 4.08 percent decrease week on week. The month-on-month decline is now 23.5 percent in the deep sea segment, with prices being in the range of $430-439/mt CFR.
The June buy-cycle in the local US scrap market is unlikely to start until next week, sources note, adding that predictions as to where prices will settle are trending all over the map. Whereas some still believe that cut grades will trend down between $30-$60/gt, with busheling prices possibly trending down at $50/gt+, others believe that cut grades could come down by $60/gt or more. “The only thing that I know now is that mils are saying they’re going to cut their programs back, and they’re saying they don’t need a lot of scrap,” a source said.
The main EAF-based steel producer in Japan, Tokyo Steel, announced its eighth cut in local scrap procurement prices during May on May 30, reflecting the still bearish conditions in the market and following the drastic drop seen in export scrap quotations late last week. Tokyo Steel cut scrap purchase prices for all grades by JPY 1,000/mt for all five of its assets, though dollar prices have lost only $1/mt due to the appreciation of the Japanese currency. Prices for H2 scrap have declined to JPY 56,000-57,500/mt ($440-452/mt) depending on the mill. The Shindachi scrap price range of Tokyo Steel has settled at JPY 58,500-62,000/mt ($460-487/mt). All prices are delivered and effective from May 31. Also, Tokyo Steel has decided to expand its production in its Tahara Plant, mainly for hot rolled coil (HRC). In order to secure more scrap, it has opened a new scrap yard in Nagoya. SteelOrbis has learned that they are aiming to secure 10,000 mt of scrap per month at the yard. The producer has announced its prices for H2 grades at the Nagoya yard at JPY 57,500/mt ($442/mt), delivered, effective from June 6.
Having held local and provincial elections on Wednesday, June 1, South Korea was out of the market for a day and will be evaluating Japanese H2 scrap export prices now with expectations of a further fall in quotations in the coming days. “We are satisfied with the domestic scrap flow. Despite the decreasing prices, scrap flow is on the good side,” a South Korean mill commented, adding, “We were off yesterday in Korea due to the election, but will know more soon and, yes, Japanese scrap export offers are likely to drop further, but by how much is for us to decide depending on the supply and demand.” In general, the South Korean scrap market seems very quiet and scrap prices have seemed to be rebounding for containerized material, but the bulk market situation is as yet unknown.
While South Korean mill Hyundai Steel has not announced bids for Japanese scrap this week, South Korean producer POSCO has decided to announce bids for HS grade scrap from Japan. Its overall prices have not changed much since last week, but demand for Japanese material has been poor in South Korea. POSCO has kept its bids for Japanese HS scrap at JPY 64,000/mt ($492/mt) CFR or JPY 60,000/mt ($461/mt) FOB, stable week on week.
On the other hand, given the deals done by Bangladesh, indications for ex-US bulk HMS I scrap offers to South Korea are at around $485-490/mt CFR, softening on the lower end as compared to $490/mt CFR recorded last week as an indication.
Vietnamese buyers are still showing little interest in importing scrap, and the offer prices to Vietnam have continued to decline this week. Meanwhile, SteelOrbis has learned that Japanese suppliers H2 scrap offers to Vietnam are standing at $470-480/mt CFR, but no deal has been reported at this level yet. There are rumors of Vietnam buying Japanese H2 grade scrap at $475-495/mt CFR, while the declining trend of scrap prices in Vietnam continues.
Also, the most recent ex-Hong Kong deal for HMS I/II 50:50 scrap by bulk to Vietnam was for a small tonnage and was closed at $445/mt CFR, SteelOrbis has learned.
After weeks of declines, new offers for shredded scrap in Pakistan have posted a slight increase this week, and some deals have already been heard at higher levels. In particular, after shredded scrap 211 of UK and European origin was sold last week at $510-515/mt CFR last week, new deals have been reported at $515-520/mt CFR this week. Meanwhile, new offers have already settled at $525-535/mt CFR. According to market insiders, restocking requirements are high and serious enquiries are coming to Pakistan, though most Pakistani buyers are still expecting to sign new deals at $520/mt CFR level.
Following a relatively long pause, Bangladeshi steelmakers have resumed bulk scrap bookings this week. Accordingly, after a deal for a mixed ex-UK 30,000 mt cargo in bulk was done at the end of last week at $516/mt CFR on average, this week another 35,000 mt cargo for ex-UK scrap has been booked at $505/mt CFR on average, including 20,000 mt of HMS grade and 15,000 mt of bonus grade scrap. Besides, another deal for a mixed ex-US 32,000 mt cargo in bulk has been done at $513/mt CFR for HMS grade and $$518/mt CFR for shredded 211 scrap. Meanwhile, offer prices for shredded scrap in containers in Bangladesh have been voiced at $540-550/mt CFR, the same as last week, though some traders said that it is still possible to find material at $530/mt CFR.
