TAIWAN STEEL SCRAP: Prices at historical high on shipping delays, buyers seek bulk imports

Spot import prices for containerized ferrous scrap into Taiwan hit a historical high in the week to Friday December 11, because of delays to shipments from the United States West Coast, sources told Fastmarkets this week.

The delays also led to buyers to look toward bulk deep-sea cargoes due to the high price of the alternative Japanese scrap and a lack of cargo space.

Fastmarkets’ daily price assessment for containerized cargoes of steel scrap, HMS 1&2 (80:20), US material import, cfr main port Taiwan increased by by $30-40 per tonne day on day to $380 per tonne on Friday December 11, up by $50 per tonne from $330 per tonne on December 4.

The last time prices were near $380 per tonne cfr Taiwan was on March 12, 2018, when prices hit $365-373 per tonne cfr Taiwan.

“There is very limited material that can be delivered in December and this has continued to [affect] January-shipment cargoes, so supplies are extremely tight now,” a Taiwanese trader told Fastmarkets this week.

Spot prices for containerized ferrous scrap in Taiwan have surged continually since early October due to slower inflows to scrapyards and a lack of freight space at the ports, which has led to the cancellation of shipments from the US’ West Coast to Asia.

Negotiations were at $330 per tonne cfr Taiwan on Monday before rising gradually to $335-340 per tonne cfr Taiwan on Tuesday and Wednesday. However, prices then increased to $340-350 per tonne cfr Taiwan on Thursday after the release of December’s Kanto Tetsugen auction prices.

And prices surged to $380 per tonne cfr Taiwan on Friday amid frantic buying by steel mills, with at least three steel mills purchasing material at that price.

The auction result saw prices rise by ¥8,105 ($78) per tonne month on month on Thursday, with the magnitude of the increase surprising many market participants. Two 6,000-tonne lots were changed hands at ¥38,910 per tonne fas and ¥38,510 per tonne fas.

“Some buyers are panicking now because they are short of material,” a buyer source in Taiwan told Fastmarkets on Wednesday December 9.

An increase of NT$300 ($11) per tonne in domestic scrap purchase prices and rebar sales prices by a major domestic steel mill on Monday failed to keep up with the current market situation.

“The downstream finished steel products market will not be able to reflect the surging raw materials prices in any way, especially with downstream demand remaining muted,” a second Taiwanese trader told Fastmarkets.

The high prices for Japanese scrap and limited supply of containerized materials have also led to buyers to consider procuring bulk deep-sea cargoes of HMS 1&2 (80:20).

“However, this is unlikely to happen because the quantity will be too big, and not many mills can discharge ferrous scrap at the rate needed for such shipments. Lastly, not every harbor can accommodate such large vessels,” a buyer source in Taiwan told Fastmarkets.

Offers for Japanese H1&H2 (50:50) were at $435 per tonne cfr Taiwan on Friday, with buyers bidding at $430 per tonne cfr Taiwan. They had initially posted bids at $335 per tonne cfr Taiwan earlier in the week while waiting for the Kanto Tetsugen auction result on Thursday.

Friday’s price was up by about $50 per tonne from the offers at $385 per tonne cfr Taiwan heard earlier in the week.

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