TAIWAN STEEL SCRAP: Prices rebound on improving sentiment, costlier bulk cargoes

Prices in the Taiwanese containerized ferrous scrap import market rebounded this week amid improving sentiment and competition for material in the bulk market, 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 $450 per tonne on Friday June 18, narrowing upward by $1 per tonne from June 17, and increasing by $8-10 per tonne from the June 11 assessment of $440-442 per tonne.

Major steel mills purchased spot cargoes at $449-450 per tonne cfr Taiwan this week, increasing their bids amid the improving sentiment in Asia, sources said.

Sellers steadily increased their offers throughout this week, from $450 per tonne cfr Taiwan to $455 per tonne cfr Taiwan, refusing to give any discounts due to steady demand. South and central American containerized scrap was offered at $440 per tonne cfr Taiwan, a buyer source in Taiwan told Fastmarkets.

Steady sales of bulk deep-sea cargoes from the United States to South Korea in the past two weeks supported demand, drawing supplies away from the containerized markets.

South Korea has bought at least two bulk deep-sea cargoes from a major US scrapyard in the past two weeks at $510 per tonne and $515 per tonne cfr South Korea. 

The country remains in the spot market for another bulk deep-sea cargo this week, bidding at $510 per tonne cfr South Korea, sources said. Offers were at $520-525 per tonne cfr South Korea.

Industry sources said domestic demand in South Korea for long steel was extremely robust, creating demand for imported scrap.

“Taiwanese buyers realize they have to pay more to secure materials because the spread between containerized and bulk cargoes is too wide at the moment,” a Taiwanese trader told Fastmarkets.

The trader expects the spread to continue narrowing if demand for US-origin bulk cargoes continues, especially if Japanese prices remain high.

Japanese scrapyards have good demand for high-grade scrap such as Shindachi, shredded and heavy scrap (HS) from buyers in South Korea, Vietnam and China, with a number of transactions heard concluded.

This includes a bulk Shindachi cargo sold at $550 per tonne cfr China, and a bulk Shindachi cargo sold at $585 per tonne cfr Vietnam.

A major South Korean steel mill also increased its bids for high-grade scrap by ¥4,000 ($36.31) per tonne in the week to June 18. It is bidding for shredded scrap at ¥55,000 per tonne, HS at ¥56,000 per tonne and Shindachi Bara at ¥57,000 per tonne, sources said.
“Prices may still continue to increase in the near term,” a buyer source in Taiwan said, after purchasing more than 2,500 tonnes of containerized scrap in total this week.
A major steelmaker in Taiwan kept its domestic purchase price for heavy scrap unchanged on Monday, and rolled over its selling price for rebar.

Offers for bulk cargoes of Japanese H1&H2 scrap (50:50) were heard to be offered at $515-520 per tonne cfr Taiwan, although buyers did not attempt to bid for such cargoes, sources said.

“It’s mainly US cargoes which buyers are interested in now. The premium for Japanese scrap is too high compared with US-origin materials, especially when comparing quality,” a second Taiwanese trader told Fastmarkets.

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