Due to increasing electricity prices, the summer lull and low demand conditions, Taiwan is showing little interest in scrap imports. Electricity costs have increased by around 50 percent in Taiwan since the beginning of summer and higher costs are causing serious problems for mills. While the number of offers from the supplier regions has also moved down, this is not expected to have a strong positive impact on the market. “A temporary recovery may be observed due to Turkey’s return to the international scrap market, but I think it will not last long,” a Taiwanese mill commented.
Offers for ex-US HMS I/II 80:20 scrap in containers to Taiwan have remained in the range of $365-370/mt CFR this week, $10-15/mt lower than the lowest price fixed in a deal at $380/mt CFR last week. “There are not many offers from the US side. I think this level is below their costs, and so they are unwilling to sell to Taiwan right now,” a source at a Taiwanese mill stated. Offers from Australia for the same grade are similar to the US on CFR basis.
Meanwhile, offers for Japanese H1/2 50:50 scrap by bulk to Taiwan have indicated a sharp decline from $435/mt CFR to $390/mt CFR. “The Japanese are really not offering high tonnages, their local market is stronger. Despite the decreases in their offer prices to Taiwan, the gap between the US and Japan is still too high,” a source commented, adding, “Japanese sellers are waiting for the approaching Kanto export tender. What we hear is that they hope Kanto will be closed at higher levels than last month because Turkey is now back in the market. But demand is not good in Taiwan.” With the absence of South Korean mills and the lack of interest in Japanese scrap in Vietnam and Taiwan, SteelOrbis believes that Japanese H2 export prices will remain soft in the coming week.
As anticipated by SteelOrbis, domestic HMS I/II 80:20 scrap prices in Taiwan have remained stable at TWD 11,300/mt ($380/mt) ex-works. The official domestic rebar prices in Taiwan have decreased by TWD 900/mt ($31/mt) week on week to TWD 21,100/mt ($708/mt) ex-works.
$1 = TWD 29.78