Prices for import scrap in Taiwan have dropped drastically over the past week with ex-Japan prices showing an even sharper fall than ex-US prices. Market sources believe that scrap prices are close to the bottom now as they have dropped by almost the same margin by which they had increased in December.
Prices for ex-US HMS I/II 80:20 scrap in containers have come to $365-370/mt CFR by the end of this week, indicating a slump of $35-40/mt since last week. This is the level at which some deals have been heard, while most offers are at $370/mt CFR or slightly above. “Prices have almost reached the level of early December. Next week, the market will be more stable ahead of the Chinese New Year. After the holiday, it is unlikely to drop more,” a Taiwan-based steel mill said.
Japanese suppliers have cut their prices even more aggressively. Though usually prices for ex-Japan H1/2 50:50 scrap by bulk are $10-15/mt higher than those for ex-US HMS I/II 80:20 scrap in containers in Taiwan, at the moment the difference has disappeared or “it is even lower,” a source said. Ex-Japan H1/2 50:50 scrap has been priced at $365/mt CFR, while last week it was at $410/mt CFR.
Such a sharp price fall for ex-Japan scrap has been attributed to the dramatic changes in the local market. Tokyo Steel has cut prices at its Utsunomiya plant in the Kanto area by JPY 9,000/mt ($87/mt) this week as "they are planning maintenance for about two weeks [at this plant] and just don't need their regular scrap enquiries," a source said. As a result, the scrap volumes offered to the export market have increased and prices have been impacted significantly.