Earlier this week, when Turkish mills returned to the market deep sea scrap prices continued to move up from where they had left off. While this upward movement was expected by market players during or after the holiday, there are questions over its sustainability given the negative mood in Turkey’s steel markets. Meanwhile, European scrap collection prices are at €320/mt DAP Belgian ports and €325/mt DAP Amsterdam, still on the strong side.
In total, Turkey has signed at least 11 deep sea scrap deals this week and is very close - if it has not already done so - to completing its scrap needs for July shipment. Ahead of the week-long holiday (June 16-23), Turkey’s deep sea scrap quotations had moved up by $7/mt as compared to the levels recorded in early June. After the holiday, deep sea HMS I/II 80:20 scrap prices have moved up by another $3.5/mt on average since the beginning of this week.
Despite the slow rising trend observed in the import scrap segment in Turkey, a break in purchases may be seen in the coming weeks before Turkish mills start to buy scrap for August shipment. This break may also halt the increasing trend of prices, since the current levels do not allow much margin to Turkish mills considering their finished steel prices.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved up by 0.91 percent week on week. The prices are now 2.72 percent higher month on month in the deep sea segment, with prices being in the range of $384-389/mt CFR.
Views on US domestic scrap for July delivery have shifted as a slight improvement in international scrap prices and rising freight rates to overseas ports comes face to face with continued low demand and falling prices for finished steel products in the US market. The July scrap forecast price differs from just earlier this week, when the predominant trend in market surveys indicated a soft-sideways to $10-20/gt ($10-$20/mt) less than June expectations for the new month across all grades, with the possible exception of primes.
SteelOrbis has learned that the current price for Mexican domestic shredded scrap has remained stable over the past week at MXN 7,150/mt ($379/mt). Additionally, HMS I/II scrap prices have risen by MXN 100/mt ($5/mt) over the same period to MXN 5,850/mt ($310/mt).
Despite the initial expectations of a soft price trend in the local German scrap market, prices have moved up in June, with support coming from the export segment. As Turkey decided to move quickly early this month to conclude deep sea scrap purchases, export yards which had been trying to exert pressure on their collection prices changed their minds and raised their prices once again. Scrap prices also increased in June given the support coming from local mills and due to the lack of sufficient scrap generation in the EU. According to the latest data provided by the Bundesvereinigung Deutscher Stahlrecycling-und Entsorgungsunternehmen e.V, in the first 20 days of May, scrap prices moved up by €2.4-7.1/mt month on month.
This week, local scrap prices have remained essentially stable in Italy. According to sources, in fact some steel mills lowered their purchase prices by €5/mt, but contracts have been closed at unchanged levels. Italian steel mills are planning three to six weeks of shutdowns this summer to cope with the very low demand for finished products. Consequently, the demand for raw material continues to be scarce and may even decrease. Traders will also take advantage of the steel mills' long breaks to carry out maintenance on their plants.
In Spain, local scrap prices continue to remain unchanged; market participants report that supply and demand remain equally tight and they do not expect further changes in July. Spanish steel mills have planned to shut down for an average of two weeks for maintenance works, some at the end of July and others at the beginning of August. Only a few small special steel producers will shut down during the entire month of August.
The leading Japanese EAF steel producer Tokyo Steel has announced increases of JPY 1,000/mt for H2 grade scrap purchase prices at its Tahara, Nagoya and Utsunomiya yards. After the announcement, Tokyo Steel’s general range for H2 grade scrap has increased by JPY 1,000/mt on the upper end to JPY 50,000-52,500/mt ($312-327/mt) depending on the mill. Shindachi scrap prices of Tokyo Steel have moved up by JPY 1,000/mt on the upper end to JPY 51,000-54,000/mt ($318-337/mt).
South Korean steelmaker POSCO has continued to give bids for Japanese scrap for the third consecutive week, with higher price levels shared with the Japanese suppliers. POSCO has shared bids for Japanese shredded scrap at JPY 58,000/mt ($362/mt) CFR, JPY 500/mt higher than the Japanese yen-based bids shared by the producer for this grade on June 21. However, due to the depreciation of the Japanese yen, dollar-based prices have moved up only by $1/mt week on week. This level indicates FOB-based prices for Japanese shredded scrap are at around JPY 55,000/mt ($343/mt, up by $1/mt amid exchange rate fluctuations.
Taiwan’s import scrap market has remained stable this week with scrap deals closed for ex-US material. However, there are signs that sellers’ intentions are changing, with scrap offer prices to Taiwan moving up. Offers for ex-US HMS I/II (80:20) scrap in containers have moved up by $10/mt week on week and are now at $350-360/mt CFR. Earlier this week, ex-Japan offers for H1/2 (50:50) scrap by bulk to Taiwan were relatively stable at $353-365/mt CFR.
The import scrap market in Bangladesh has remained in wait-and-see mode this week following the break for the Eid holiday. At the same time, prices for containerized scrap have remained relatively stable in occasional deals reported this week, while no major inquiries in bulk have been reported so far. Specifically, in the containerized segment, offers for ex-EU shredded scrap have settled at $425-428/mt CFR, versus $425-430/mt CFR last week, while a deal price for ex-Australia shredded scrap has been reported at $430/mt CFR, the same as two weeks ago. Besides, another deal for ex-US shredded scrap has been signed at $430/mt CFR, according to sources. At the same time, trade activity in the bulk segment has been weak, with offers for ex-US HMS grade scrap heard at $405/mt CFR, while offers for ex-Japan H2 scrap have been estimated at $400/mt CFR.
Although the national holiday officially ended at the end of last week, in Pakistan most market insiders have not resumed work so far, with industry production levels ranging not higher than 30-40 percent, while some steel mills have yet to restart operations. At the same time, ongoing fluctuations in freight rates have continued to affect the import scrap trade. More specifically, offers for ex-UK/EU shredded scrap in containers have been voiced at $425/mt CFR, against $425-430/mt CFR before the holiday. According to market insiders, several deals for around 3,000 mt in total have been reported for ex-EU shredded scrap at $418-424/mt CFR, down by $5/mt over the past two weeks.