TAIWAN STEEL SCRAP: Electricity rationing dampens spot demand

The recent start of electricity rationing in Taiwan capped any major price climbs in its containerized ferrous scrap import market during the week to Friday July 2, sources told Fastmarkets.

Fastmarkets’ daily price assessment for containerized steel scrap, heavy melting scrap 1&2 (80:20), United States material import, cfr main port Taiwan was $455-460 per tonne on Friday, unchanged from the previous day and up by $2-5 per tonne from $453-455 per tonne a week earlier.

Transactions were confirmed by market participants and major buyers at $455, $457, $458, 460 per tonne cfr Taiwan on Wednesday for United States-origin cargoes.

Containerized Australian heavy melting scrap 1&2 (80:20) was offered at $450-455 per tonne cfr Taiwan at the start of the week, while South and central American material was offered at $450 per tonne cfr Taiwan.

“While the rainy season has passed and demand for rebar has rebounded slightly, the recent start of electricity rationing in Taiwan has caused demand to remain weak amid ample supply,” a Taiwanese trader told Fastmarkets.

At the start of the week, sellers had been insistent on maintaining their offers at $460-470 per tonne cfr Taiwan, compared with bids at $450-455 per tonne cfr Taiwan.

There was market chatter that a containerized HMS 1&2 (80:20) cargo had been sold at $468 per tonne cfr Taiwan, but this could not be confirmed by any buyer or trader.

There were no offers for bulk deep-sea HMS 1&2 (80:20) cargoes from the United States due to the electricity rationing.

“It is too early now to discuss anything on a bulk basis because any shipment will only arrive two months later in September, and no one knows what the spot market will be like then,” a buyer source said.

A major steelmaker in Taiwan increased its domestic purchase price for scrap and selling price for rebar by NT$300 ($10.75) per tonne.

Offers for bulk Japanese H1&H2(50:50) were at $510 per tonne cfr Taiwan at the start of the week, before falling to $490 per tonne cfr Taiwan by Tuesday. There was market chatter that offers for such cargoes had fallen further to $470-480 per tonne cfr Taiwan by Thursday, although this could not be confirmed by the parties involved.

“Regardless, Japanese cargoes are still too highly priced now compared with containerized cargoes,” a second Taiwanese trader told Fastmarkets.

Sentiment for import prices remained unclear, with market sources unsure of how prices will move next.

“Rebar demand is not too bad and local scrap prices have been weak for a while now, so prices may start to correct soon,” a third Taiwanese trader said.

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