Since the beginning of the week, SteelOrbis hears that the number of offers to Turkey and the number of Turkish mills interested in import scrap are both on the low side. Since deep sea scrap prices have remained in a narrow range for a long time, some sellers report they are getting ready for the holidays instead of sharing offers.
Over the past week, Turkey has continued to buy scrap from the EU and the US, with prices remaining relatively stable. Towards the end of the week, US-based suppliers started to voice their intentions to increase offer prices to Turkey. SteelOrbis heard that they are citing with European holidays, and with the absence of their competitors they may ask for higher prices in the coming week. Both in the EU and the US, scrap collectors report that flow to yards is slow. The recent collection prices in the EU were in the range of €320-330/mt DAP, a source said today, July 19. But the holiday mood slowly seize the European scrap market. For now, no risk of a surprise price drop or a surge in Turkey’s import scrap market is observed.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved down by 0.13 percent week on week. The prices are now 0.91 percent higher month on month in the deep sea segment, with prices being in the range of $383-390/mt CFR.
US scrap prices for August are now discussed at strong sideways to higher for August, as domestic scrap dealers indicate that supplies at local yards in both the Midwest and Northeast are down sharply month on month. Last week, East Coast scrap traders estimated local yard inventories are down by 20-30 percent amid a combination of hot weather and low prices being paid at yards. A strong sideways August scrap forecast would put Midwest busheling scrap at or above the July settled price of $355-375/gt ($361-381/mt) delivered to mill, while HMS#1, which has a more limited application locally, would be at or above $320/gt ($325/mt) delivered. In the US East Coast scrap markets, busheling scrap in the vicinity of Pittsburgh would be at or above $350-385/gt ($356-391/mt) delivered to mill, while shredded scrap would be at or above the July settled price of $370/gt ($376/mt) delivered to mill.
SteelOrbis has learned that the current price for Mexican domestic shredded scrap has declined by MXN 100/mt ($5/mt) over the past week to MXN 7,050/mt ($382/mt). Additionally, HMS I/II scrap prices have decreased by MXN 250/mt ($14/mt) over the same period to MXN 5,200/mt ($282/mt).
This week saw a further slowdown in trading activity in the local Italian scrap market, with prices virtually unchanged and demand and supply equally low given the upcoming summer shutdowns of Italian steel mills. Market participants pointed out that the long shutdowns of steel mills this year have created a very different market trend compared to that of other European countries or Turkey, where stable prices and some slight increases have been seen. In Italy, in fact, local scrap prices have lost an average of €25-35/mt since their peak on May 17. Sources seem to agree that prices have bottomed out and market participants' expectations for September are for unchanged price levels and some increases from mills that have stopped buying.
With regard to the local Spanish scrap market, sources report that prices are stable for the moment. However, one major steel mill has announced a €10/mt drop in its scrap purchase prices and it remains to be seen whether other producers will follow suit. Market participants report that demand is not particularly lively. In fact, shutdowns are also imminent in Spain.
The leading Japanese EAF steel producer Tokyo Steel has announced a JPY 500/mt cut in scrap purchase prices for its Kyushu facility today, July 19, effective as of tomorrow. Despite the announcement, Tokyo Steel’s general range for H2 grade scrap has remained in the range of JPY 49,500-52,000/mt ($314-330/mt) depending on the mill.
Although Taiwan’s import scrap market has recorded slight increases in prices, most market players believe that, despite this, scrap prices may be considered to be stable. Offers for ex-US HMS I/II (80:20) scrap in containers to Taiwan have moved up from $347/mt CFR to $347-352/mt CFR. Ex-Japan offers for H1/2 (50:50) scrap by bulk to Taiwan moved up by $5/mt over the past week to $360-365/mt CFR.