WEEKLY SCRAP WRAP: Global markets stable, await Turkey’s return from holiday
Global scrap prices have remained largely unchanged during the working week from Monday August 28 to Friday September 1, with markets awaiting the end of holidays in Turkey.
With no fresh cargoes heard booked this week, Turkish scrap prices remained flat along with those for Taiwanese imports and US exports. Indian imported scrap prices inched upward on improved demand.
Turkey’s national Victory Day and the religious Eid al-Adha holidays kept the market quiet all week, with market participants waiting until next week to attempt to conclude deals.
Although no new deals were heard this week, some rumours about cargoes said to have been booked last week surfaced in the market.
Metal Bulletin’s daily scrap index for Northern Europe-origin HMS 1&2 (80:20) scrap remained at $347.05 per tonne cfr on Friday, while the index for USA-origin material was also unchanged at $356.33 per tonne cfr.
The premium for US material over Northern European scrap therefore remained at $9.28 per tonne on September 1.
Turkey’s holidays end on Tuesday of next week, after which activity is expected to resume, sources said.
“I expect bulk sales to happen next week, with EU bulk suppliers selling first, since stocks at their yards seem to be good,” one US source said.
Market participants considered what may happen to prices once their Turkish counterparts end their holidays.
“Some rumours from today indicate that prices will rebound then head down,” one European source said on Thursday.
“I feel there will be no change and Turkey will not buy next week,” one UK source said. “If people are on holiday, sometimes they don’t do business straight after coming back [so there could be] a bit of a delay.”
A prolonged lack of activity in Turkey would probably lead to prices falling in the country, he added.
But a third source disagreed, saying that current prices were correct and would remain firm in the coming weeks.
US export scrap markets remained quiet this week, but the country’s East Coast docks increased their ferrous scrap buying prices across the board to fulfil previously agreed commitments.
No bulk cargo sales have been booked from the USA to Turkey since August 9, when a US Gulf Coast cargo was secured by a Turkish mill at $353 per tonne cfr for HMS 1&2 (80:20).
There is still optimism that the next sale of HMS 1&2 (80:20) from the USA could reach $360 per tonne cfr.
“The Turks still need a lot of scrap for October shipment. Steel prices for rebar and billets – in Turkey and elsewhere, including China – are still rather strong, and so are iron ore and coking coal,” an export source said.
Boston scrap export yards are now paying $275 per gross ton for HMS 1, up by $10 per ton as yards seek to attract material for export orders that are being filled.
In Philadelphia and New York, prices increased to $290 per ton for HMS 1, a $15-per-ton increase.
Metal Bulletin sister title AMM’s weekly US East Coast ferrous scrap export indices for HMS 1&2 (80:20) and shredded scrap remained unchanged at $312.71 per tonne fob New York and $318.61 per tonne fob New York, respectively.
Taiwan’s transaction prices for imports of containerised HMS-grade ferrous scrap remained stable at $295-300 per tonne cfr this week, although offer prices to the country fell.
Offers of USA-origin HMS 1&2 (80:20) were reported at $300-305 per tonne cfr Taiwan, down from $310-315 per tonne cfr last week.
One reason for the decrease in offer prices this week was a drop in demand for imported scrap due to many buyers favouring domestic material.
“I’ve heard that most mills have suspended purchases of imported scrap this week as they can get sufficient supplies from the local market at more attractive prices,” a trader said.
One Taiwanese producer purchased USA-origin HMS 1&2 (80:20) at $295 per tonne cfr, he said, but “has also purchased a lot of domestic scrap”. Another mill source said that he has not purchased any imported scrap this week, and “has been buying domestic scrap only”.
A few other import deals for USA-origin HMS 1&2 (80:20) were heard at $298-300 per tonne cfr Taiwan this week.
When purchasing from domestic suppliers, Taiwanese mills were said to sometimes prefer more premium scrap grades than HMS 1&2 (80:20).
The use of such grades in the steelmaking process, including busheling and P&S, was said to allow steel mills use fewer electrodes. Prices for electrodes have skyrocketed in the past few months due to the short supply of material on the global market.
“The Taiwanese steel mills are thinking about their melting efficiency, so they need scrap with fewer impurities [because] more premium grades [allow them] to save on electrodes,” a second trader said.
Prices for containerised imports of shredded scrap arriving in India inched up this week amid higher consumption from certain makers of stainless and alloy steels.
Metal Bulletin’s index for containerised shredded scrap imports into India inched up to $340.63 per tonne cfr Nhava Sheva on Friday, compared with $338.17 per tonne cfr last week.
UK material was heard sold at $340-343 per tonne cfr Nhava Sheva, including one transaction for 1,000 tonnes to a stainless steelmaker in the country.
EU-origin material was heard to be bought by a stainless steelmaker at $345 per tonne cfr Nhava Sheva, while USA-origin shredded was heard sold at $337 per tonne cfr Nhava Sheva. Offers were heard as high as $350 per tonne cfr Nhava Sheva, but with no buying at this price.
“There is scattered buying by alloy steel and stainless makers, but [carbon] steelmakers are not buying,” one seller said.
Despite the higher volume of shredded sales heard this week, markets remained largely subdued amid the religious Eid al-Adha holiday in Islamic nations such as Turkey and Pakistan.
“Everyone is waiting for Turkey to come back and for domestic price settlements [elsewhere],” one Middle Eastern trader said.
One factor hurting Indian finished steel demand has been particularly heavy monsoon rains in the country this week.
“The rain will [affect] the market as the availability of material may be a concern and prices can be raised by the suppliers,” an Indian trader said.
Turkish domestic scrap prices remained stable this week, with markets closed for the holidays.
Nadia Popova in Moscow and Lisa Gordon in New York contributed to this report.