Following the announcement of higher energy costs for industrial usage by the Economic Coordination Board in Turkey, sentiment in Turkey’s import scrap market has deteriorated. Higher finished steel prices have failed to gain traction and so have not provided any support for the scrap segment. The three latest ex-US scrap bookings in Turkey have confirmed the negative outlook for the scrap market.
Currently, the scrap collection price of a Belgium-based scrap exporter stands at €290/mt DAP. On Monday this week, an Amsterdam-based exporter bought scrap at €301/mt DAP. Another European scrap exporter reported that its collection prices are at around €295/mt DAP, adding that lower prices are met with slower flow to yards. A major steel producer in Turkey commented that deep sea scrap prices have further room to move down, stating, “I am not saying that we are expecting a deep dive, but another downward correction is possible.”
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved down by 1.08 percent week on week. The prices are now 0.54 percent higher month on month in the deep sea segment, with prices being in the range of $365-371/mt CFR.
Sources in the US close to SteelOrbis have confirmed that at least one mill has come out with their October pricing. According to multiple sources, a Detroit-area mill has announced at sideways on primes and down $20/gt on shredded and P&S.
This is a shift from what was expected last week, when rumors that mills might try to take all grades down by $10-20/gt, and perhaps by even more than that on primes, were swirling within the market.
Average spot scrap prices in Italy have fluctuated over the past week, depending on the grade. Since Italian producers have followed diverse trends in their domestic scrap purchase prices, the price ranges for some grades are wide.
Due to the category 4 Typhoon Koinu which has hit Taiwan this week, air and maritime traffic as well as trading in Taiwan has been suspended. The Taiwanese domestic rebar market has been silent due to the impact of the typhoon. Over the past week, offers for ex-US HMS I/II (80:20) scrap in containers to Taiwan have remained unchanged at $370-375/mt CFR. Japanese scrap suppliers are still sharing offers for H1/2 (50:50) scrap by bulk to Taiwan at $373-380/mt CFR.
While Japanese scrap market players have been trying to keep prices firm amid the ongoing good demand in the country, there is pressure on export prices due to the slower appetite received from foreign buyers. Japanese H2 scrap offers to Vietnam are at $380/mt CFR, $5/mt lower than the levels recorded in last week’s bookings. On Friday, October 6, Tokyo Bay FAS-based prices for H2 grade scrap are at JPY 51,500/mt ($345/mt).
SteelOrbis’ reference price for ex-Japan H2 scrap has decreased slightly by JPY 700/mt on the lower end and moved up by JPY 500/mt on the upper end to JPY 50,000-52,500/mt ($335-352/mt) FOB.
Trade activity in the import scrap market in Bangladesh has continued to lack strength amid continuing issues with opening letters of credit (LCs). Most offers for shredded scrap in containers from the UK, Australia and New Zealand have been reported at $430-435/mt CFR, down by $5/mt week on week. Offers for ex-Australia and New Zealand HMS I/II 80:20 scrap have been reported at $425/mt CFR, the same as last week. Meanwhile, following several deals for PNS scrap at $450-455/mt CFR last week, new offers have been voiced at $440/mt CFR and at a maximum of $445/mt CFR. Furthermore, offers for HMS I scrap from the Middle East have been heard at $430/mt CFR.
In Pakistan, this week market insiders have reported new offers and occasional deals for ex-UK/EU scrap at lower levels. Specifically, according to sources, import scrap trade has remained moderate in Pakistan due to the continuing liquidity issues and the slow demand recovery, with several deals for around 3,000 mt in total of ex-UK/EU shredded scrap in containers signed at $420-425/mt CFR levels at the end of last week-beginning of this week. However, by Wednesday, October 4, new offers decreased to $410-415/mt CFR Qasim. In the meantime, this week local rebar manufacturers have decreased their offers to domestic customers by around PKR 10,000/mt ($35/mt), given the strengthening of the national currency against the US dollar.