TAIWAN STEEL SCRAP: Buyers swoop on low-priced cargoes

Fastmarkets’ daily price assessment for containerized cargoes of steel scrap, HMS 1&2 (80:20), US material import, cfr main port Taiwan was $360-365 per tonne on Friday, down $5 per tonne from a day earlier and down by $40 per tonne from $400-405 per tonne on January 22.

Prices have continued on a sharp downtrend this week on the back of a rapid slashing of prices by traders who wanted to sell off materials quickly in a hastily weakening market.

Initial negotiations which started off at $390-405 per tonne cfr Taiwan on Monday plunged quickly to $370 per tonne cfr Taiwan by Wednesday, with transactions later heard concluded at $375 per tonne cfr Taiwan on Tuesday.

Negotiations fell further to $365-370 per tonne cfr Taiwan by Thursday, with traders short-selling cargoes at $370 per tonne cfr Taiwan and bids by end users coming in at $350-365 per tonne cfr Taiwan.

Negotiations fell again on Friday, to $360-365 per tonne cfr Taiwan.

Bids at $320 per tonne cfr Taiwan were dismissed by market sources as unworkable.

“Buyers are bidding at those levels because domestic prices have fallen by NT$1,000 ($36) per tonne this week, especially with a major steel mill slashing domestic purchase prices twice,” a Taiwanese trader told Fastmarkets on Thursday.

Domestic scrap prices were at an equivalent of $330 per tonne this week.

“However, domestic prices are not an accurate gauge of import prices because of the quality of domestic scrap is different,” another trader in Taiwan told Fastmarkets on the same day.

Buyers said domestic scrap supply was sufficient, and that they were not in need of imported materials urgently.

“I have more than enough time to wait to buy given my high scrap inventory and the potential for prices to fall further,” a buyer source at a steel mill told Fastmarkets on Thursday.

Offers for Japanese scrap have also fallen quickly, especially on news of Tokyo Steel’s Utsunomiya facility undertaking maintenance, as well as power outages in the country.

Offers were at $385-390 per tonne cfr Taiwan at the start of the week, down from $410-425 per tonne cfr Taiwan last week. They fell further to $360-365 per tonne cfr Taiwan by early Friday.

There was talk in the market that offers had fallen below $360 per tonne cfr Taiwan by Friday, with a transaction concluded at $355 per tonne cfr Taiwan. But this could not be confirmed by counterparties.

There were transactions heard concluded at increasingly lower prices of $375, $370 and $365 per tonne cfr Taiwan throughout the week.

“There’s a sense that Japanese prices are lower than materials from the United States. All this is because Tokyo Steel is not taking materials at its Utsunomiya works,” a second buyer source in Taiwan told Fastmarkets.