Earlier this week, it was observed that the positive mood observed at the end of last week disappeared quickly at the start of the new week due to the escalating military conflict between Israel and Iran. The war in the Middle East had a negative impact on Turkey’s steel and scrap markets, curbing the upward expectations for scrap prices. Turkey still needs scrap unless Turkish mills decide to cut capacity utilization rates and there are several factors that can cause prices to move up, including potential disruptions in the Suez Canal. However, sales by Turkish mills have slowed down once again, and market players have become very cautious.
As the week ends, Turkey’s import scrap market has failed to gain speed and only limited deals have been done. Two new ex-Baltic bookings signal for a very slight recovery, though almost all market players believe that the actual trend of the market will be set next week. Turkish mills’ procurement pace of deep sea scrap cargoes are attracting attention. Market sources report that Turkey has not bought enough cargoes to be shipped in July. Several producers report that they may be forced to cut production, as SteelOrbis mentioned above. Some sellers are still trying to keep their prices firm, while some have cut their offers to Turkey over the past week, dropping their quotations by $5/mt. “With several ongoing uncertainties about the trading tariffs and rising protectionism, now there is the Israel-Iran conflict. This weekend can be important for the war in Iran; we may see a ceasefire or an escalation. I think Monday, at most Tuesday, we can see a clearer price trend in Turkey’s steel and scrap markets,” another scrap supplier commented.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved up by 0.15 percent week on week. The prices are now 1.6 percent lower month on month in the deep sea segment, with prices being in the range of $336-342/mt CFR.
US scrap price expectations for July are seen mostly sideways in market surveys this week, though some Midwest scrap suppliers told SteelOrbis that pricing could rise next month as supply appears to be declining.
This would contrast with the recent sideways-to-higher June scrap market settlement, which occurred amid continued limited demand for export scrap and the implementation of doubled 50 percent steel tariffs by the US Trump administration on June 4. “I think supply is tighter and demand is picking up,” commented one Midwest scrap supplier. “We’re hearing sideways to up $20-30/gt for next month.” Another scrap insider disagreed but did not offer an opinion on price. “I highly doubt that report because the domestic market is at least three weeks away from settling for July.” Still another insider thought it was too early to predict the July scrap situation. “Maybe next week, we’ll get some ideas on the call for July.”
Based on the current sideways-to-higher July call, Midwest prime busheling scrap in the Ohio Valley could settle at or above the $435-460/gt ($442-467/mt) June settle, while shredded scrap might settle at or above $375-380/gt ($381-386/mt). According to scrap insiders, Ohio Valley P&S and HMS grades could settle at or above $361-371/gt ($367-377/mt), and $325-345/gt ($330-350/mt), respectively.
The Italian scrap market continued its inertial trend this week. Scarce scrap availability that has been going on for several months and a limited demand from steel mills is translating into a substantial price stability with some slight adjustments based on the needs of each producer.
The sluggish mood also affected the Spanish scrap market. Domestic prices are stable with a slight downward trend, and a similar tendency is also reported on the import side.
At the end of monthly negotiations, the local German scrap market showed a stable to slightly upward movement depending on the region and the mill. Most producers have chosen to keep their purchase prices unchanged for June round, and some slight price increases by €5/mt were recorded in the northern, eastern and south-western parts of Germany. The other regions marked stable prices, with an exception for one mill in the west which had almost no need to buy and reduced its scrap purchase prices by €15/mt.
On the export side, scrap collection prices to export yards in Germany are now standing at €250-255/mt DAP, slightly upwards in the higher end of the range for HMS I/II 80:20, whereas in Poland, HMS I reference scrap collection prices to export yards have been reported in a range of €250-270/mt DAP.
Taiwanese import scrap prices have stabilized after their declining trend over the past weeks. Market sources report that after softening a bit this week, import scrap quotations in Taiwan have stabilized and is now considered to have reached the bottom.
Offers for ex-US HMS I/II (80:20) scrap in containers to Taiwan have been in the range of $295-298/mt CFR.
Japanese H1/2 (50:50) scrap bulk cargoes have been offered at $315-323/mt CFR.
Vietnam’s demand for import scrap has shrunk over the past week as summer season has started in the country. Uncertainties surrounding the international trading market as well as the slower finished steel sales, also contributes to Vietnamese buyers’ cautiousness.
Over the past week, offers for Japanese H2 scrap to Vietnam have declined by $5/mt on the upper end to $320-325/mt CFR. Meanwhile, ex-US bulk HMS I/II 80:20 scrap offers to Vietnam have moved up by $5/mt on the lower end to consolidate at $350/mt CFR. Also, market sources report that ex-Russia A3 grade scrap offers to Vietnam are around $340/mt CFR.
The Tokyo Bay FAS-based price for H2 grade scrap is at JPY 41,000/mt ($281/mt), while the FOB-based export price at JPY 42,000/mt ($288/mt) for the grade in question.
The Pakistani scrap import market has witnessed a modest decline in deal prices this week, with buyers pushing bids further down amid cautious sentiment. Trading activity has slowed as participants adopt a wait-and-see approach following the announcement of Pakistan’s federal budget. More specifically, this week, offers for ex-Europe/UK shredded scrap in containers have been voiced mainly at $370/mt CFR, against $375-380/mt CFR last week, though, according to sources, most bids have moved down to $365-368/mt CFR level, down by $4-5/mt week on week. According to sources, a deal for ex-EU shredded scrap has been signed at $367/mt CFR following several deals for around 4,000-5,000 mt in total of ex-EU/UK shredded scrap signed at $368-372/mt CFR at the end of last week. According to sources, despite policy changes, clear post-budget direction and its implementation are still pending, leaving market participants hesitant. Many buyers are holding back purchases while awaiting further clarity, which is expected by the end of June. In the meantime, local prices of scrap equivalent to shredded in Pakistan have settled at around PKR 140,000/mt ($494/mt) ex-warehouse, mainly the same as last week. Besides, the tradable level for local 10-12 mm rebar of grade 60 has been heard at PKR 235,000/mt ($830/mt) ex-works.