At the beginning of the current week, Turkey concluded another ex-Europe scrap deal and prices have moved up significantly. As Turkey starts buying deep sea cargoes for March shipment, the question is the pace of the upcoming procurements, which will have a big impact on the prices. Workable ex-US scrap prices were considered to be at least $425-426/mt CFR. A major US scrap supplier commented that “There is a positive sentiment in the market since scrap flow in the US is also slow. No one is in a rush to sell”. The freight was another reason for the upward expectations.
However, ex-US scrap deals disclosed in Turkey disclosed on February 1, do not show the price increase expected on the US side. Having said that, the general expectation amongst players has not changed and next week will shed greater light on the future trend of deep sea scrap quotations.
Scrap collection prices at EU-based export yards remain at around €350/mt DAP, while sources still report slow scrap flow. A source from Germany thinks that collection prices in the EU should move up by at least €15/mt in February, “This may also impact export prices and yards collection costs”. There are several news about some European producers buying scrap for their idle furnaces, hence demand in the EU is expected to be lively in February. With Turkey looking forward to start a new round for March shipments, scrap prices’ potential to move up is more likely.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved up by 1.68 percent week on week. The prices are now 3.17 percent higher month on month in the deep sea segment, with prices being in the range of $420-426/mt CFR.
SteelOrbis has learned that effective today, February 2, the dock delivered price range for HMS I/II 80:20 scrap in Newark, New Jersey, will revise downward by $10/gt to an approximate range of $315-$320/gt, delivered. Also, the dock delivered price range for P&S scrap in Newark, New Jersey, will revise downward by $10/gt to an approximate range of $335-$340/gt, delivered.
SteelOrbis has learned that the current price for Mexican domestic shredded scrap is now at MXN 9,150/mt ($519/mt), compared to MXN 9,450 ($537/mt) last week. Additionally, HMS I/II scrap prices are now being heard at MXN 7,700/mt ($437/mt), compared to MXN 8,000/mt ($455/mt) a week ago.
This week, the local Italian scrap market was essentially unchanged, however, some grades, turnings and demolitions in particular, experienced a small downward adjustment of about €5/mt. According to one source this is a move by steel mills "to cool the market and avoid further increases [in scrap prices]", for others the reason behind this drop is that the finished steel market hasn’t fully recovered yet.
Despite these declines, market players are optimistic about February. One source said, "We closed our new monthly deals virtually unchanged [compared to January]," and added that a turnaround is unlikely given the increases in HRC prices in Europe and in rebar prices globally. According to another trader, mills are expected to return more actively to buying not because the demand for finished steel has improved but because of the scarcity of scrap on the market, and therefore "prices should at least remain stable".
Taiwan’s import scrap market is moving down. Offers for ex-US HMS I/II (80:20) scrap in containers to Taiwan have narrowed week on week to $377-382/mt from $375-385/mt recorded last week. Japanese scrap suppliers’ offers for H1/2 (50:50) scrap by bulk to Taiwan have moved to $388-393/mt CFR.
Ahead of the approaching Lunar New Year (Tet) holiday, Vietnamese import scrap market has indicated a slight decline in terms of prices. Offers for Japanese H2 grade scrap to Vietnam have moved up to $405/mt CFR. As of today, February 2, Tokyo Bay FAS-based prices for H2 grade scrap were at JPY 51,000/mt ($345/mt).
SteelOrbis’ reference price for ex-Japan H2 scrap has softened slightly by JPY 500/mt to JPY 52,000-53,500/mt ($351-362/mt).
In Bangladesh, prices for import scrap in containers have showed a mixed trend as while some suppliers have been ready to provide discounts other have maintained their offers stably high. At the same time, according to sources, buyers’ interest has increased given some easing in approval of letter of credits (LCs) by banks. Specifically, more deals for ex-Australia scrap in containers have been heard this week, with a deal for ex-Australia HMS I/II 90:10 scrap signed at $418/mt CFR, while a few deals for around 1,500-2,000 mt in total of ex-Australia PNS scrap have been reported at $445-450/mt CFR. Offers for ex-EU shredded scrap in containers have been voiced at $440/mt CFR, the same as last week, however, according to sources, several offers have already been heard at $435/mt CFR, though no deals have been reported so far.
Deal prices for import scrap in Pakistan have been mainly stable this week, with most deals for ex-EU/UK materials still at $435-440/mt CFR, the same as last week. Besides, according to sources, this week a few deals for ex-US shredded scrap is reported to have been done at $435/mt CFR. Offers for ex-EU/UK HMS I/II 80:20 have settled at $410/mt CFR, the same as last week. Meanwhile, offers for ex-Middle East HMS I/II 80:20 scrap have been voiced at $410-415/mt CFR, mainly the same as last week, and, although a few deals have been signed at the abovementioned levels, sources said that most Pakistani customers are unsure about booking ex-Middle East scrap due to issues with export duty.