Early this week, sentiment in Turkey’s import market was bullish with Turkish mills seeking deep sea cargoes for January shipment, which resulted in a sharp price increase. Scrap offer prices to Turkey continued to increase in the following days with sellers maintaining their pricing power due to the approaching holiday season and the upward trend observed in freight rates. SteelOrbis started to hear that higher freight rates are causing postponements of shipments of previous deals, potentially creating a need for prompt shipments. It is estimated that Turkey still needs at least 14 more deep sea cargoes for shipment in January, though reluctance to accept higher prices has been observed among buyers.
However today, December 8, it is observed that scrap suppliers liked the new levels. The total number of transactions done in two days is 11, raising the question whether the uptrend in Turkey’s deep sea scrap prices have come to an end or not. Today, most market players believe that after such a round, deep sea scrap prices may park in the current range. The number of offers in the market is now higher than the buyers. SteelOrbis hears that Turkish mills are inclined to monitor the market for some time as their immediate needs are mostly satisfied. A source from a major mill believes “the uptrend has come to an end”, another one says he is sure that “stability will be achieved.” However, there are players that do not agree with this sentiment (this was not in the original article). A major European scrap supplier thinks the rise is not linked to demand at all, “This is a cost push, what we gained as sales prices went to freight. We almost work with zero margins, hard time for sellers.” Another market source think “the situation in the US regarding collection, winter conditions, logistics, some delays might still lead premium grade scrap quotations over $430-433/mt CFR.”
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices for Turkey on CFR basis have moved up by 7.2 percent week on week. Prices are now 14.73 percent higher month on month in the deep sea segment, with prices being in the range of $421-428/mt CFR.
Scrap market prices in the US Northeast have settled up across the board. Prices this month were supported by several factors, such as the seasonal slowdown in scrap inflows, weak mill inventories, higher scrap export prices, and higher domestic steel prices. As a result, HMS I and shredded scrap prices in the local US market have increased by $31/mt.
SteelOrbis has learned that the current price for Mexican domestic shredded scrap is now at MXN 8,250/mt ($462/mt), compared to MXN 7,950/mt ($450/mt) two weeks ago. Additionally, HMS I/II scrap prices are now being heard at MXN 6,850/mt ($384/mt), compared to MXN 6,550/mt ($371/mt) two weeks ago.
After rising by €25-45/mt over the past month, the upward trend of local Italian scrap prices seems to have come to a halt. In fact, deals closed in the first week of December indicate unchanged levels from last week. Despite the stable prices, the market has remained under pressure over the past week due to the gap between supply and demand. As another market source noted, "Steel mills have slowed down production because they are short of scrap, so demand is still good, but scrap is scarce and this should keep prices stable." Market participants expect prices to remain unchanged throughout December. With the Christmas holidays approaching, commercial activity is also expected to slow down.
The price level recorded in this month’s Kanto scrap export tender has caused US dollar-based prices to move up more sharply due to the significant appreciation of the Japanese yen. In the Kanto tender, the highest bid was at JPY 51,020/mt FAS, indicating an increase of JPY 782/mt as compared to the levels recorded in early November. SteelOrbis has learned that 5,500 mt of scrap changed hands in the tender.
On December 7, Tokyo Bay FAS-based prices for H2 grade scrap were at JPY 49,000-50,000/mt ($340-347/mt). Tokyo Bay FAS prices for HS grade scrap were at JPY 52,500-54,000/mt ($364-374/mt), while prices for shindachi scrap were at JPY 51,000-52,000/mt ($354-360/mt) FAS.
The leading Japanese EAF-based steel producer Tokyo Steel has retracted the previous cut in its local scrap purchase prices made on November 1. Tokyo Steel’s general range for H2 grade scrap has increased by JPY 500/mt and is now at JPY 48,000-51,000/mt ($333-354/mt) depending on the mill.
Taiwan’s domestic rebar market has been active over the past week, while market players believe scrap quotations are set to move up as rebar demand continues to be observed. Offers for ex-US HMS I/II (80:20) scrap in containers to Taiwan have increased over the past week from $375-380/mt CFR to $378-393/mt CFR. Japanese scrap suppliers are sharing offers for H1/2 (50:50) scrap by bulk to Taiwan at $390-395/mt CFR.
Over the past week, Vietnam’s import scrap prices have continued their upward trend. Market sources report that the finished steel market is also recording price increases but “not as strong as scrap quotations.” This week, ex-US West Coast HMS I/II 80:20 offers for bulk cargoes to Vietnam are at around $430/mt CFR. Meanwhile, deals for Japanese H2 grade scrap to Vietnam have been closed at $382-385/mt CFR.
SteelOrbis’ reference price for ex-Japan H2 scrap has remained stable this week at JPY 51,000-53,000/mt ($353-367/mt) FOB. However, the appreciation of the Japanese yen has resulted in a $9/mt increase in the dollar-based prices over the past week.
In Bangladesh, import prices have been moving in different directions, with offers for scrap in containers still voiced at more or less the same levels as last week, while offers for scrap in bulk have been rising following the bullish market in Turkey. Meanwhile, trade activity in the import scrap market has remained limited this week as most buyers have continued to face problems with opening letters of credit (LCs). More specifically, offers for ex-EU/UK shredded scrap in containers have been heard at $435/mt CFR, against $430-435/mt CFR last week, while offers for PNS scrap have been estimated at $440-445/mt CFR, the same as last week. Besides, a deal for around 2,000 mt of ex-Hong Kong PNS scrap has been signed at $440/mt CFR this week. In the bulk segment, however, new import prices have increased sharply this week following the strong increases seen in the Turkish market. Specifically, indicative offers for ex-US HMS I/II 80:20 have been heard at $430-435/mt CFR, up by $10-15/mt week on week, while offers for shredded scrap have settled at $440-445/mt CFR, versus $425/mt CFR last week. No fresh deals have been reported for ex-US scrap so far. However, according to sources, several batches for ex-Singapore scrap in bulk have been booked in Bangladesh at $425/mt CFR for HMS I/II 80:20 and at $433/mt CFR for PNS scrap this week.
In Pakistan, most offers for imported shredded scrap in containers have remained at more or less the same level as compared to last week. Offers for ex-EU/UK shredded scrap in containers have been voiced at around $420/mt CFR, while, following a few deals at $415/mt CFR last week, this week at least 6,000 mt are reported to have been booked at $415-418/mt CFR Karachi, according to sources.