Despite the varying expectations early this week, Turkey’s import scrap purchase prices have moved up. With at least five deals concluded in the current week, the sentiment in Turkey is positive. “Prices will continue their rising trend until Turkish mills complete February shipments,” a source at one mill commented. Also, collection prices in the EU have recovered quickly after the holiday season, supporting the current sentiment. The euro-US dollar exchange rate stands at 1.09 today, January 5, and is still causing difficulty for European scrap suppliers. On the other hand, expectations for the local US scrap market have changed and the new price strategy remains to be seen. “Sellers have an advantage: Turkey needs to buy a lot of cargoes for February shipment. Traditionally, prices remain firm ahead of the Chinese New Year holiday [starts on February 10]. However, we do not expect a big price surge in the coming period,” a source at a Turkish mill reported.
Late on January 4, two ex-EU scrap bookings were shared with the market, done by the same Turkey buyer. A Marmara-based producer concluded an ex-Netherlands deal with HMS I/II 80:20 scrap standing at $415-416/mt CFR, indicating a $1-2/mt increase. Also, an ex-UK deal was closed at $412/mt CFR for HMS I/II 80:20 scrap. Hence, SteelOrbis’ reference price for European HMS I/II 80:20 scrap has remained unchanged.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved up by 1.59 percent week on week. The prices are now 0.6 percent lower month on month in the deep sea segment, with prices being in the range of $414-419/mt CFR.
This week, sentiment in the local US scrap market has shifted from optimistic to tepid, as multiple mills throughout the US have cancelled bookings that have not yet arrived. “Mill orders came across as cancelled today,” a Chicago-area source said. “I still think demand is good, but there seems to be plenty of supply.” Sources in other regions largely agree. “It seems that the December increase has impacted January. Several factors are in play,” added a source in the Ohio Valley, adding, “Mild weather in the Midwest and Northeast has allowed scrap to flow fairly well from November into early January. The risk is generally off for any long weather interruptions. Mills bought heavy and paid up and dealers have largely delivered and if they didn’t some mills are cancelling. [Mills’] inventories are reportedly good.” As of late on Thursday, January 4, US mills have yet to announce January pricing. Some speculate that the mills may not come out until the start of next week.
SteelOrbis has learned that the current price for Mexican domestic shredded scrap is now at MXN 8,900/mt ($515/mt), against 8,700/mt ($487/mt), last week. Additionally, HMS I/II scrap prices are now being heard at MXN 7,759/mt ($449/mt), against MXN 7,450/mt ($417/mt) a week ago.
Local German scrap prices moved up during the month of December as anticipated. Since winter conditions and the lower number of working days in December impacted scrap flow, scrap prices moved up, also supported by Turkey’s increased deep sea scrap procurement prices. European collection prices in Amsterdam have increased to €330/mt DAP, up by €5/mt. However, market sources report that local steel producers in Europe have not yet increased their purchase prices so much in January. Market players believe that local European producers may be forced to accept higher levels if they want to compete with exporters.
Import scrap prices in Taiwan have softened further amid the negative sentiment observed in the international scrap market during the holiday season. The recovery seen in Turkey’s import scrap market has not been reflected in Asia yet. Offers for ex-US HMS I/II (80:20) scrap in containers to Taiwan are now at $375-381/mt CFR. Japanese scrap suppliers are sharing offers for H1/2 (50:50) scrap in bulk to Taiwan at lower levels of $389-390/mt CFR.
The market has remained sluggish in Bangladesh and customers have been maintaining a wait-and-see stance ahead of the elections on January 7. At the same time, while European suppliers are still inactive due to winter holidays, the indicative offers for ex-Australia shredded scrap in containers have been voiced at $435/mt CFR, the same as last week, while the tradable level is still estimated at around $430/mt and slightly above. Market insiders have reported a few deals for around 5,000-7,000 mt in total for ex-Middle East HMS I/II 80:20 scrap signed at $425-430/mt CFR, though no official confirmation has been provided by the time of publication.
In Pakistan, the import scrap trade has remained muted, while most offers for imported shredded scrap in containers have remained relatively stable over the past week. Indicative offers for ex-EU shredded scrap in containers have been voiced at $430-435/mt CFR, the same as last week. At the same time, although Pakistani customers are not yet fully concerned about the supply chain issues arising from the Red Sea shipping crisis, most market insiders believe that it is inevitable that Pakistan will also face problems due to developments affecting cargo movements. Thus, even though no fresh bookings have been reported so far, according to sources, more and more Pakistani customers prefer to opt for ex-Middle East cargoes with a view to keeping supply chains healthy “in the worst-case scenario”.