Earlier this week, Turkey has concluded its first ex-US scrap booking since the beginning of this month, with the benchmark HMS I/II 80:20 scrap price moving up in the deal. However, the increase has remained below sellers’ expectations. Most scrap suppliers were aiming for higher than $385/mt CFR Turkey levels in offers and the deal signaled for $383-384/mt CFR for HMS I/II 80:20 scrap.
While market sources were debating whether ex-US scrap price increase would remain limited due to the decline observed in the local US scrap market, they were also reminding that offers from the US remained at higher levels. At the end of the week, a Marmara-based producer has concluded a deal for HMS I/II 80:20 scrap at $386/mt CFR and bonus grade scrap at $406/mt CFR. This booking pushed ex-US benchmark scrap quotations up by $2.5/mt.
Two deals are reportedly done from the UK. Same seller seems to sign two different contracts, one to Iskenderun region and another to Izmir region with HMS I/II 80:20 scrap price standing at $380/mt CFR. This price also shows a very small increase for European scrap, merely $1/mt. Most market players think the gap between ex-EU and ex-US scrap is healthy after these recent bookings.
It should be reminded that Turkey will be out for Feast of Sacrifice holiday at the beginning of the coming week and many players may decide to extend the holiday to a week-long one. Turkey is known to continue trading over holidays and if the need of scrap continues, it is possible to hear new deals in the coming week.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved up by 0.39 percent week on week. The prices are now 0.39 percent higher month on month in the deep sea segment, with prices being in the range of $380-386/mt CFR.
US domestic scrap prices in the Northeast settled at down $20-$35/gt compared with May. US scrap prices in the Ohio Valley settled down $20/gt to $41/gt in June versus May settled prices.
SteelOrbis has learned that the current price for Mexican domestic shredded scrap have risen by MXN 100/mt ($5/mt) over the past week to MXN 7,150/mt ($379/mt). Additionally, HMS I/II scrap prices have remained stable over the same period at MXN 5,750/mt ($305/mt).
Over the past week, SteelOrbis’ sources report a substantial balance between supply and demand in local Italian scrap market, both sluggish at the moment, resulting in unchanged prices. Some mills have already slowed down or stopped production and others are planning stops for next month in an attempt to cope with low demand for finished products. Furthermore, the attempt to raise prices is not yielding the desired results and inventory levels are starting to be high according to a steel mill official, who added that they will continue trying to lower scrap purchase prices for these reasons.
Traders agree that there is no room for further decreases in scrap prices because new scrap is expensive and traders are fighting to get their hands on it. Another contact added that scrap is scarce and producers need it and even signals from the international market do not indicate any possible downward movement for Italian scrap. Market players therefore expect a substantially stable market throughout the summer period, with possible fluctuations in a very limited range depending on the needs of individual steel mills.
With regard to the local Spanish scrap market, prices remained stable this week; sources report that mills’ stocks are really low, but so is demand. Production is expected to slow down as some producers will shut down a few days for maintenance, but mills are stressed to get enough raw material. Therefore, traders are expecting small increases in prices.
Prices for ex-Japan scrap in the Kanto tender have decreased by JPY 1,226/mt today, June 13. Market sources report that the ongoing maintenance works at Tokyo Steel are exerting some pressure on Japanese scrap prices. In the Kanto export tender, the highest bid was at JPY 51,364/mt FAS. As a result, the dollar-based price has decreased by $10/mt from $337/mt to $327/mt over the past month, including the changes in the Japanese yen-US dollar exchange rate.
Meanwhile, Tokyo Bay FAS-based prices for H2 grade scrap have declined on the upper end by JPY 500/mt ($2/mt) as compared to the levels recorded on May 31, to JPY 50,000-51,000/mt ($318-325/mt).
South Korean steelmaker POSCO has announced bids for Japanese scrap, keeping its H2 scrap prices relatively stable. However, market sources report that the bids shared with Japan are higher than the producer’s domestic scrap procurement prices. POSCO has shared bids for Japanese shredded scrap at JPY 57,500/mt ($366/mt) CFR, the same on Japanese yen basis compared to the producer’s previous bid for this grade on May 21.
Taiwan’s import scrap market remained stable over the past week, while rebar market is not showing much trading due to “bad rainy weather”, market sources report. Offers for ex-US HMS I/II (80:20) scrap in containers have indicated small changes and are now at $345-350/mt CFR instead of the $342-348/mt CFR range recorded late last week. Ex-Japan offers for H1/2 (50:50) scrap by bulk to Taiwan have also changed slightly to $355-366/mt CFR.