Earlier this week, Turkey started to look for deep sea scrap cargoes for shipment in August, but the mood in the market was relaxed. Market sources believed July could be a slower month for deep sea scrap purchases as compared to June, and most sources thought that, with some European mills taking a break for the holidays, others in the scrap collection segment would also be leaving the market over the holiday period. Hence, the European scrap segment was expected to remain firm.
In the middle of the week, some Turkish mills were inclined to sign new deals if they found deep sea cargoes at the current price levels, but there was not a high number of such cargoes available. As Turkey continued to sign ex-US scrap deals, small price increases continued to be seen in the bookings done.
At the end of this week, there were several ex-US scrap deals signed and European sellers were trying to push prices up. Market sources report that Turkey needs scrap cargoes for shipment in the first half of August and this may help push up prices a little, and will at least prevent any downward slide of prices in the coming period. The mood in the market was more positive compared to the start of the week.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved up by 0.06 percent week on week. The prices are now 2.86 percent higher month on month in the deep sea segment, with prices being in the range of $384-390/mt CFR.
The outlook for local US scrap market has become negative as spot market declines accrued across most finished steel grades. Demand for US finished steel goods has remained muted amid high interest rates, soaring year-on-year inflation statistics, high energy prices and the looming November US presidential election, market insiders said. Overall, there is the possibility of a $20-40/mt fall in the local US scrap market when prices settle for July, market sources report, though some cite the slower scrap flow in the US, saying prices could remain stable during the July buy-cycle.
SteelOrbis has learned that the current price for Mexican domestic shredded scrap has remained stable over the past week at MXN 7,150/mt ($386/mt). Additionally, HMS I/II scrap prices have declined by MXN 400/mt ($22/mt) over the same period to MXN 5,450/mt ($294/mt).
Local scrap prices in Italy have fallen again, by €5-10/mt, over the past week, depending on the steel mill and the grade purchased. According to sources, trading activity is at a very low level. One of the factors negatively affecting the scrap market are the long production halts (four to six weeks) planned by finished steel producers for the summer period. According to sources, this will reduce demand further and scrap prices will lose support. Another negative factor for the finished products market and consequently for the scrap market are energy costs, which are much higher in Italy than in the rest of Europe, affecting the margins of steel mills and causing the price of scrap to continue to fall.
On the other hand, the shortage of raw material is becoming more and more evident, mainly for turnings and even more so for busheling. The generation of new scrap is very low because the automotive sector is working very little.
As regards the local scrap market in Spain, market participants report stable prices except for a decrease of €5/mt in the HMS and shredded categories. Supply and demand are balanced, according to sources, so market players do not expect any further changes before the summer holidays, which for Spanish producers will last about two weeks.
South Korean steelmaker POSCO has continued to share bids for Japanese scrap for the fourth consecutive week, increasing its purchase prices week on week. POSCO has shared bids for Japanese shredded scrap at JPY 59,000/mt ($366/mt) CFR, JPY 1,000/mt or $4/mt higher than the Japanese yen-based bids shared by the producer for this grade on June 28. Ex-Japan H2 prices for South Korea are at JPY 52,000-53,000/mt FOB, increasing by $4/mt to $322-328/mt FOB week on week.
Earlier this week, Tokyo Bay FAS-based prices for H2 grade scrap were at JPY 50,000-51,500/mt ($310-320/mt). This level shows that FOB prices are at JPY 51,000-52,500/mt ($316-326/mt) for this grade.
Taiwan’s import scrap market has remained stable again this week. However, the number of offers has been lower than usual. All players are waiting to see the result of the Kanto tender in Japan. Offers for ex-US HMS I/II (80:20) scrap in containers have moved down by $7-11/mt week on week and are now at $343-349/mt CFR. Earlier this week, ex-Japan offers for H1/2 (50:50) scrap by bulk to Taiwan were relatively stable at $356-362/mt CFR as compared to $353-365/mt CFR late last week.
Prices for import scrap in Bangladesh have been moving sideways, with more deals reported for containerized scrap mainly from Australia, New Zealand and the UAE, while materials from Asia, including those from Hong Kong, Malaysia and Singapore have been less attractive due to higher freight costs. More specifically, in the containerized segment, following several deals for ex-Australia shredded scrap at $430/mt CFR last week, this week several deals for around 5,000 mt have been signed at $425-426/mt CFR, though most offers have remained at levels of $430/mt CFR and higher. Besides, around 2,000 mt of ex-New Zealand shredded scrap have been sold to Bangladesh at $425/mt CFR. Meanwhile, trade activity in the bulk segment has remained weak, with indicative offers for ex-US HMS grade scrap heard at $405/mt CFR, the same as last week. According to sources, two deals for ex-Singapore HMS I/II 70:30 scrap, for 8,000 mt each, are reported to have been signed at $400/mt CFR this week.
Import scrap offers in Pakistan have remained largely unchanged, though a number of deals for ex-EU/UK shredded scrap in containers have been reported at slightly higher levels as compared to last week. At the same time, while a number of Pakistani buyers have started restocking, signing new deals, there are still a lot of customers who have remained out of the market, waiting for finished steel sales to pick up first. More specifically, offers for ex-EU/UK shredded scrap have been voiced at $425-428/mt CFR, mainly the same as last week, while several deals for around 4,000-5,000 mt in total have been signed at $425-426/mt CFR, up by $2/mt on the lower end of the range week on week. Meanwhile, a few deals for ex-US shredded scrap have been signed at $418-419/mt CFR, while ex-US offers for shredded scrap have been voiced at around $422/mt CFR.