Earlier this week SteelOrbis observed that some Turkish producers are inclined to show resistance to the ongoing price uptrend. On the other hand, price inquiries in Turkey’s import scrap market have increased, and scrap suppliers believe this is another signal that prices will continue to rise. Several new deals were disclosed in Turkey’s import scrap market on August 16, with deep sea scrap prices moving up further. The current price levels are considered attractive for both buyers and sellers amid accelerated bookings. On August 17, deep sea scrap prices continued to increase.
A contact at one Turkish mill said, “These levels are still high for us to sustain our production rates. But producers do not want to miss the available delivery terms when prices are visibly going up. We believe the $370-375/mt CFR range will be the peak of deep sea quotations.” The same source pointed to the Turkish government’s tight monetary policy and added that accessing money will be harder for everyone in the coming months, and so no significant revival in the finished steel market is expected, despite Turkish mills’ willingness to buy deep sea cargoes now. It is observed that suppliers are very confident that import scrap prices will continue their uptrend for now. A major European scrap seller said that the scrap supply deficit in the market is still the determining factor and is stronger than the lack of finished steel demand globally. “With the recession in the EU, especially premium grade scrap prices will rise, while there are not enough premium grades coming from industrial production,” the source said. While some sellers believe deep sea scrap has some room to move up towards $380/mt CFR, others think the peak may be reached at $375/mt CFR.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved up by 3.12 percent week on week. The prices are now 5.46 percent higher month on month in the deep sea segment, with prices being in the range of $368.5-375/mt CFR.
Abysmal scrap inflows and higher ex-US scrap cargo sales prices to Turkey have numerous scrap market sources saying they think prices have the potential to trend up in September. Many suspect that cut grades could firm by $20/gt from August settled levels. Prime scrap, however, remains a wildcard.
SteelOrbis has learned that the current price for Mexican domestic shredded scrap is now at MXN 5,000/mt ($288/mt), compared to MXN 5,150/mt ($291/mt) last week. Additionally, HMS I/II scrap prices are still being heard at MXN 4,250/mt ($244/mt), unchanged in pesos compared to last week.
While no significant recovery is expected this year in Taiwan in terms of finished steel demand, import scrap offers to Taiwan have increased under the circumstances. However, Taiwanese buyers have only accepted stable prices or a slight increase, nothing more for now. Offers for ex-US HMS I/II (80:20) scrap in containers to Taiwan were at $370-380/mt CFR this week. Japanese scrap suppliers increased their offers for H1/2 (50:50) scrap by bulk to Taiwan to $380-390/mt CFR, from $375-389/mt CFR.
Trading in Vietnamese market remains slow. Market players report that there are not many transactions or deals in terms of scrap. A Vietnamese source said that Vietnamese mills are running with low capacity, “around 30-40 percent only”. This week, containerized HMS I/II 80:20 offers have increased to $384-390/mt CFR Vietnam, lower end represents ex-EU offers and upper end represents ex-US offers. However, Vietnamese buyers’ bids are still standing at around $370/mt CFR.