WEEKLY SCRAP WRAP: Global demand tapers off due to public holidays, Covid-19 restrictions

A short working week for many countries in the global scrap market, coupled with the continuing Covid-19 restrictions, resulted in a dip in demand and falling prices in the week to Friday May 1.

  • Turkey books lower cargoes on reduced output and demand
  • Market in United States remains flat on lack of trading
  • Vietnam market quiet due to public holiday
  • Demand for Taiwan scrap dips
  • India demand dips on continued inactivity 

A short and slow week in Turkey due to various public holidays led to just two of cargoes being booked, sending prices down, while the Covid-19 pandemic continues to take its toll in the country, reducing steel demand and reducing output at mills.

Fastmarkets’ daily index for steel scrap, heavy melting scrap (HMS) 1&2 (80:20), US origin, cfr Turkey, was $236.30 per tonne on Friday May 1, down from $251.83 per tonne a week earlier.

The daily index for steel scrap, HMS 1&2 (80:20), North Europe origin, cfr Turkey, was $242.42 per tonne on Friday May 1, also down from $258 per tonne on Friday April 24.

Prices in the US ferrous export market remained flat owing to a lack of sales, with dock-based recyclers increasing their buying prices by $10 per ton over the past week in an effort to draw material into their export facilities.

Recyclers operating at the docks were paying at least $185 per gross ton for No1 heavy melt in New York and Philadelphia, up by $10 per ton from last week; and $190 per ton in Boston, up $15 per ton from last week.

In addition, recyclers operating at the docks were paying up to $155 per ton for shredder feed and $135-140 per ton for auto bodies, according to suppliers into the New York market.

One supplier said that all the major exporters had been contacting his company looking for material.

“It appears that they are all short on their current orders. They want the tons, but don’t want to be upside down on their orders, which is also known as the big squeeze,” a seller into the Boston area said.

Turkey has been absent from the US since buying three cargoes on April 15, with an 80:20 mix of HMS 1&2 selling between $256 and $258 per tonne.

With no new US East Coast sales, Fastmarkets’ price assessment for steel scrap HMS 1&2 (80:20), export index, fob New York, was unchanged at $238.33 per tonne on April 29.

Sales from the US West Coast were also scarce, with South Korea bypassing the US and purchasing instead from Japan, although some HMS 1&2 (80:20) was  sold to Taiwan at at $223 per tonne cfr.

Fastmarkets’ steel scrap HMS 1&2 (80:20), export index, fob Los Angeles, remained flat at $216 per tonne on April 29.

Prices for scrap into Vietnam were unchanged on April 30 due to various public holidays, with no confirmed transactions heard as a result.

Fastmarkets’ weekly price assessment for steel scrap H2, Japan-origin import, cfr Vietnam, remained at $234-235 per tonne cfr on April 30.

“Some buyers are looking for cargoes, but they are not in a hurry and [are happy to] wait until after the holidays in Vietnam this week,” a Vietnamese trader told Fastmarkets last Wednesday.

Vietnam is celebrated Reunification Day on Thursday and Labor Day on Friday, limiting trading activity to the first three days of the week.

Japan’s Golden Week holiday started on April 29 and lasts until May 5, with Japanese workers returning to work on May 6.

Scrap purchase price cuts announced by Tokyo Steel, Japan’s largest operator of electric-arc furnaces, weighed on sentiment among buyers, who now expect prices to continue falling after Golden Week.

Fastmarkets’ weekly price assessment for deep-sea bulk cargoes of steel scrap, HMS 1&2 (80:20), cfr Vietnam, was $240-247 per tonne on April 29, down by $1-2 per tonne week on week due to the lack of activity in the market.

Buyers have indicated that they would not pay any more than $240 per tonne cfr Vietnam for deep-sea bulk cargoes of HMS 1&2 (80:20), particularly with Japanese supplies being cheaper and global seaborne prices trending lower.

Prices for Taiwan scrap dipped due to a softening of demand, with Taiwanese buyers cutting down on purchases after stocking up in recent weeks.

Transactions for containerized cargoes of HMS 1&2 (80:20) from the US West Coast were being concluded at ever-falling prices throughout the previous week, down from $224-225 per tonne cfr in the first two days of that week to around $223 per tonne cfr by mid-week.

Fastmarkets’ daily price assessment for containerized cargoes of steel scrap, HMS 1&2 (80:20), US material import, cfr main port Taiwan, was $223 per tonne cfr on Thursday April 30, down by $3-4 per tonne from a week earlier.

“Many steel mills had already purchased sufficient materials over the past few weeks,” a Taiwanese buyer source told Fastmarkets.

In India, the price of imported scrap slumped following a continued lack of trading activity as a result of the Covid-19 lockdown in the country – along with the general weakness of global scrap markets.

Fastmarkets calculation for the steel scrap, shredded, index, import, cfr Nhava Sheva, India, at $259.38 per tonne on May 1, down from $269.13 per tonne one a week earlier.

Although no deals were heard because of the lockdown, some sources were offering material at $255-265 per tonne last week, down from $255-280 per tonne the week before .

Since the lockdown was introduced in India in March, and subsequently extended until May 3, and despite steel being classed as an essential service, trading has been heavily affected by a lack of available workers at steel mills, as well as a lack of couriers to transport bank documents and to make raw materials deliveries.

From April 20, local areas have been allowed to ease the Covid-19-related restrictions depending on their levels of infection, but ports, such as Nhava Sheva and Mundra, have been declared “red zones,” with materials there left stranded. Some big cities with construction and infrastructure projects have been given the same classification.