In the deals mostly done earlier in the week, Turkey’s import scrap market has continued its increasing price trend. Turkey has almost completed its scrap purchases for December shipments and has started to seek cargoes for January shipment. Market sources agree that the ongoing appetite from Turkey is pushing prices higher than the initial expectations. As Turkish mills have not announced significant cuts in production utilization rates, seasonal factors are negatively impacting scrap flow. Also, December is a shorter month for business due to the holiday season. Hence, mills in need of cargoes are still active in the market. Flat steel producers are also in a better position as the flats market remains firm and active. The same cannot be said for the long steel market though. The domestic rebar market is sluggish, with local traders continually pointing to the increased interest rates in Turkey. Turkey’s central bank this week hiked interest rates from 35 percent to 40 percent. Traders still keep lower than usual tonnages in their warehouses, reporting that investing money via banks is as profitable as investing in rebars. Meanwhile, the Turkish lira has continued to lose strength, currently standing at TRY 28.88 to a dollar. As a result of the price rises for deep sea and short sea scrap imports, Turkish producers’ domestic scrap purchase prices have also increased.
SteelOrbis has heard that some European scrap exporters are collecting material at around €310-315/mt DAP, though some sellers do not accept such levels. The estimated number of cargoes bought for December shipment is in the range of 26-30. “In addition to the deals already closed, producers need at least 20-25 deep sea scrap cargoes for January. This means they will be forced to buy them before the holiday season. Hence, deep sea scrap prices remain firm and tend to move up,” a scrap seller commented. On the other hand, some market players believe the uptrend may be close to its peak since the margin between scrap and rebar is narrow and the finished steel market, particularly for longs, is slow.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved up by 2.24 percent week on week. The prices are now 10.71 percent higher month on month in the deep sea segment, with prices being in the range of $385-390/mt CFR.
SteelOrbis has learned that the current price for Mexican domestic shredded scrap is now at MXN 7,950/mt ($450/mt), compared to MXN 7,600/mt ($431/mt) last week. Additionally, HMS I/II scrap prices are now being heard at MXN 6,550/mt ($371/mt), compared to MXN 6,350/mt ($360/mt) last week.
This week, the bullish trend in the local Italian scrap market has accelerated sharply as there is still a shortage of material and as mills continue to place orders to keep production going. Local scrap prices have increased by an average of €15-20/mt from last week.
Local German scrap prices have moved up over the month of November, though the increases recorded were slight for most grades, with a drop even seen for E3 grade scrap prices. Turkey’s appetite for deep sea scrap improved faster than anticipated and international scrap prices moved up very quickly, supporting the local German scrap market.
As Taiwan’s rebar market has recovered and experienced a lively week, while import scrap prices have also improved. Offers for ex-US HMS I/II (80:20) scrap in containers to Taiwan have increased over the past week from $363-375/mt CFR to $368-377/mt CFR. Japanese scrap suppliers are sharing offers for H1/2 (50:50) scrap by bulk to Taiwan at $370-385/mt CFR, while last week this range was at $370-380/mt CFR.
Import prices for scrap have kept rising in Bangladesh this week, though business activity in the import scrap market has remained moderate as most buyers have continued to face delays in approvals from banks in opening new letters of credit (LCs). Specifically, this week a new deal is reported to have been signed for ex-Australia HMS I/II 80:20 scrap in containers at $410/mt CFR, while new ex-Australia offers have been voiced at $415/mt CFR, up by $5-10/mt week on week. Offers for ex-EU/UK shredded scrap have increased by $5/mt over the past week to $430-435/mt CFR. Besides, according to sources, several Bangladeshi buyers have started to accept offers for ex-Hong Kong PNS scrap at $445/mt CFR, up by $10/mt week on week. In the bulk segment, however, trade has remained close to zero so far, while offers for ex-US HMS I/II 80:20 scrap have increased to around $420/mt CFR, against $405-410/mt CFR last week, while ex-US shredded and bonus scrap offers have been estimated at $425/mt CFR and $430/mt CFR, respectively, up by $15/mt week on week.
In Pakistan, most deal prices for imported shredded scrap in containers have remained at relatively the same levels as compared to last week, as customers have refused to accept higher offers given the still slow finished steel demand in the country. In particular, several deals for ex-EU/UK shredded scrap in containers have been voiced at $412-415/mt CFR, mainly the same as last week. According to sources, most offers are still at $415/mt CFR.