At the beginning of the current week an ex-US scrap deal to Turkey heard over the weekend indicated that deep sea scrap prices to Turkey decreased by another $5/mt. This downward movement did not come as a surprise to market players because the negative sentiment was pointing to further decreases. Right after these news, a European scrap seller accepted lower prices and confirmed deep sea scrap prices remain soft. On March 6, mood was still negative. Turkish mills were thinking that Ramadan starting on March 10 and the local elections to be held on March 31 will cause steel trading to slow down in Turkey. According to a source at a major Turkish mill, “Those two factors are creating uncertainties in an environment where the international fundamentals are also indicating a negative movement”. With the following US deals closed at lower levels, it was obvious that the number of offers in the market were taking their toll on deep sea scrap quotations.
However, today, March 8, expectations of some players have switched to a more positive sentiment following the deals in question, while others still believe the downtrend in Turkey’s scrap market will continue. SteelOrbis hears that more sellers have withdrawn from the market, reporting they are in no situation to accept the current price levels. A source from a major Turkish producer thinks “Turkey’s import scrap market may take a breather in the current levels, but still set to decline after this round of purchases”. An ex-EU scrap seller agrees: “There is obviously resistance from sellers, Turkish mills are making inquiries, but their price ideas are lower than sellers. Who will come out as the winner from this deadlock, we will have to wait and see”. A major European scrap supplier thinks that “Turkey’s import market has clearly stabilized and there is no particular rush on the sellers’ side. €310/mt DAP collection prices do not get much response from the sub-collectors and is not sustainable. No one is sitting on stocks and there is no overhang. Also, other markets such as India, Bangladesh and Egypt sensed price correction in Turkey has stopped”. One of the sellers in the EU has mentioned, “€305/mt DAP is not welcomed by sub-collectors, the situation in the Baltic is also similar”.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved down by 2.73 percent week on week. The prices are now 10.51 percent lower month on month in the deep sea segment, with prices being in the range of $368-381/mt CFR.
As of mid-to-late last week, scrap market sources throughout the US believed that March prices would likely trend at down $30-$40/gt for cuts and shred, and down by as much as $40-$50/gt on primes. Early this week, however, after news that scrap prices into Turkey had endured several downward revisions, sentiment has taken a turn for the worse. On March 6, numerous scrap market players have confirmed that a Detroit-area mill has announced their March pricing at down $70/gt on primes, down $50/gt on shred, and down $40/gt on P&S. Most other mills have yet to announce their prices.
SteelOrbis has learned that the current price for Mexican domestic shredded scrap is now at MXN 7,050/mt ($403/mt), compared to MXN 7,400/mt ($422/mt) a week ago. Additionally, HMS I/II scrap prices are now being heard at MXN 5,300/mt ($303/mt), compared to MXN 5,800/mt ($331/mt), last week.
After remaining practically unchanged for six weeks, local scrap prices in Italy fell by an average of €5-10/mt this week. Steel mills, which had been trying to lower scrap purchase prices for some time, took advantage of the sharp international declines to achieve lower levels.
However, market participants believe that the price decrease will not be as pronounced as in overseas markets due to the limited availability of scrap, with some traders reporting difficulties in finding material to buy.
In the Spanish scrap market, local prices remained stable this week, as did import prices. However, market participants expect declines in both segments next week, in the wake of what is happening internationally.
The leading Japanese EAF steel producer Tokyo Steel has decreased its scrap procurement prices for all plants by JPY 500/mt. However, since the Japanese yen has gained some strength against the US dollar, dollar-based prices have increased as compared to the previous levels announced on March 1. Tokyo Steel’s general range for H2 grade scrap has declined to JPY 51,500-52,500/mt ($348-356/mt) depending on the mill.
Vietnamese buyers continued to exert pressure on Japanese scrap this week. Bids for Japanese H2 grade scrap to Vietnam were at around $380/mt CFR this week, showing the price ideas of sellers and buyers differ from each other. As of today, March 8, Tokyo Bay FAS-based prices for H2 grade scrap were at JPY 52,500/mt ($357/mt).
SteelOrbis’ reference price for ex-Japan H2 scrap has declined by JPY 1,500/mt on the lower end and by JPY 600/mt on the upper end to JPY 49,000-53,500/mt ($333-364/mt) FOB.
Downtrend of Taiwanese import scrap market continues in the current week, with both the US and Japan-based scrap suppliers accepting lower levels in actual deals. Meanwhile, rebar prices in the country are also moving down. Offers for ex-US HMS I/II (80:20) scrap in containers to Taiwan were at $355-368/mt this week. Japanese scrap suppliers’ offers for H1/2 (50:50) scrap by bulk to Taiwan have moved down by $5-10/mt to $370-375/mt CFR over the past week.
In Bangladesh, more deals have been reported for containerized scrap this week as local rebar mills have been focusing on restocking with prices falling sharply in new deals. More specifically, following several bookings done at the beginning of this week for around 2,000 mt in total for ex-Australia shredded scrap in containers at $420-422/mt CFR, against $425/mt CFR last week, new offers have dropped to $415/mt CFR by the end of the week. Meanwhile, ex-EU/UK offers for shredded scrap have been estimated at $415-420/mt CFR, against $430-435/mt CFR last week. Furthermore, new deals for 5,000 mt of ex-Australia HMS grade scrap in containers have been reported at $400/mt CFR this week, against offers at $410/mt CFR last week. In the meantime, offers for ex-US shredded scrap in bulk have been heard at $405-410/mt CFR, down by $15-20/mt week on week, while according to sources, buyers are negotiating at $400/mt CFR level.
Pakistani buyers have been delaying new scrap bookings as mood in finished steel segment has remained negative this week. Meanwhile most import offers for shredded 211 scrap of UK and EU origin in containers to Pakistan have fallen to $415-425/mt CFR, against $430-432/mt CFR last week. According to sources, trade has been limited this week, with only an occasional deal reported at around $420/mt CFR, while most buyers’ bids have declined to below $415/mt CFR. At the same time, although offers from the Middle East have been voiced in Pakistan at higher levels as compared to those from Europe and from the UK, according to sources, offers from the UAE and Bahrain have been rather workable because of the shorter lead time. Offers for shredded scrap of Dubai origin have been heard at $440/mt CFR, down by $10-13/mt week on week, while offers for HMS grade scrap have settled at $400/mt CFR, versus $415/mt CFR last week.