WEEKLY SCRAP WRAP: Global markets weaken on wide fall in demand
Global steel scrap prices softened in the week ended Friday July 6, amid a fall in demand across most regions. Turkey booked no new deep-sea cargoes and the Indian market was also quiet, while prices on the East Coast of the United States remained flat due to a lack of deals.
Bucking the trend, prices in Taiwan edged upward with improved demand, after there being no changes last week.
Turkish steel producers have stayed away from the deep-sea scrap market, with no cargoes booked between Monday and Friday, amid limited domestic and export demand for finished steel products, sources told Metal Bulletin this week.
After completing their bookings for July deliveries, Turkish steel producers went quiet, with demand for finished steel in both the local and export markets failing to bounce back after the country’s presidential and general elections in June.
“Turkish mills ended their July bookings and will probably wait for a while to see the market direction [before restarting] their deep-sea purchases,” a Turkish mill source told Metal Bulletin.
“The domestic long steel market did not recover after the elections. Demand from the construction sector is still weak. This is because of increasing interest rates and the oversupply of houses,” another source said.
“Everybody in the market expected the lira to strengthen after the elections, which might have resulted in a downturn in domestic rebar prices. But this did not happen and buyers have continued to struggle with high rebar prices in the local market,” a third source added.
Metal Bulletin’s daily index for Northern European HMS 1&2 (80:20) remained at $349.57 per tonne cfr Turkey on July 6, down from $349.86 per tonne cfr on July 2, while the daily index for similar material from the US closed on Friday at $357.86 per tonne cfr.
This left the premium for US material over Northern Europe-origin material at $8.29 per tonne on Friday.
Prices for shredded scrap on the US East Coast and HMS-grade scrap on the country’s West Coast have been trending in opposite directions this week, with shredded in high demand and prices gaining momentum in the international market.
A Turkish mill bought 30,000 tonnes of shredded scrap on June 28, while a South Korean mill bought 35,000 tonnes of HMS 1&2 (80:20) during the same week.
American Metal Market’s weekly shredded scrap index settled higher this week at $347 per tonne fob New York, up from $343.98 per tonne previously. But the West Coast ferrous scrap index for HMS grades fell to $332 per tonne fob Los Angeles from $332.50 per tonne.
The East Coast ferrous scrap index for HMS was flat at $332.50 per tonne on a lack of deals.
Import prices for containerized HMS-grade material in Taiwan increased this week due to steady demand from end-users.
Metal Bulletin’s assessment of import prices for US-origin HMS 1&2 (80:20) sold into Taiwan was $335-340 per tonne cfr for the week ended July 6, up from $330-335 per tonne a week earlier.
US-origin scrap was offered at $340-345 per tonne cfr Taiwan during the week, up from $340-343 per tonne cfr Taiwan in the previous week.
Deals were concluded at $335-340 per tonne cfr Taiwan for US-origin scrap, up from $330-335 per tonne cfr.
Demand was steady, end-users said, due to regular stocking of the raw material by steel mills.
There was no sudden spike in demand, they added, because the demand for downstream finished steel rebar and beams has remained tepid.
But a major buyer purchased 4,000 tonnes of imported material this week.
“Prices have moved up because sellers have raised their offers on firmer prices in the US,” a Taiwanese trader said.
Buyers have accepted the higher offers, continuing to purchase spot cargoes on an as-needed basis, without stocking up too much on ferrous scrap inventory.
“There is no strong reason to believe that prices will go on an upward trend in the coming weeks because Taiwanese steel mills are not likely to increase their consumption volumes,” a second Taiwanese trader said.
This was due to the higher overhead costs which Taiwanese mills currently face, especially for electricity, because electrical supplies are diverted to home use instead of industrial uses for summer.
“Spot prices in the Taiwan market are among the highest in Asia now, especially because a major regional mill has reduced its demand for scrap due to high inventory levels,” a third Taiwanese trader said.
Prices for containerized shredded scrap imports into India slipped this week while the monsoon season and a fall in domestic scrap prices kept the market subdued, sources told Metal Bulletin on July 6.
Metal Bulletin’s weekly index for containerized imports of shredded scrap into India edged down by $0.87 per tonne to $380.51 cfr Nhava Sheva on July 6, compared with $381.38 cfr Nhava Sheva on June 29.
One deal for shredded was heard at $378 per tonne cfr Nhava Sheva, while other offers for shredded material were about $380-387 per tonne cfr.
“There is a lot of competition between sellers because there is not too much demand in the market right now,” a buyer said. “Domestic prices are also subdued.”
And a seller said: “I’m expecting prices to be down for July because it’s monsoon season. Domestic prices have gone down by $50 per tonne [recently].”
The local market had come down a lot due to the monsoon season, a trader said. “Domestic prices are down by $40 per tonne. It’s very quiet,” he said.
“We’re waiting for the right time to find out where the market is,” a second trader added. “The construction sector is under pressure from the monsoon season, and the Indian rebar markets are struggling due to there being no sales, so prices [have] dropped.”
Various market participants told Metal Bulletin that they could achieve $385 per tonne for shredded material sold into Pakistan this week.
Turkey domestic scrap
Turkish domestic scrap prices remained largely stable over the week that ended on July 2, with demand for material being moderate, sources told Metal Bulletin.
Only one steel mill changed its buy price for auto bundle scrap over the week, while the rest kept their prices unchanged.
As a result, Metal Bulletin’s price assessment for auto bundle scrap remained flat at TRY1,510-1,630 ($326-352) per tonne delivered on July 2.
“The demand is the same as [in the previous] week and there has not been much change in the market, so everybody has kept their buy prices unchanged,” a Turkish source said on Monday.
Meanwhile, ship scrap prices showed only minimal changes over the week.
Long steel producers IDÇ and Habas increased their buy prices for the material by $4 per tonne to $347 per tonne delivered, while Özkan increased its price by $2 per tonne to $345 per tonne.
Metal Bulletin’s weekly price assessment for Turkish domestic melting scrap from shipbreaking widened to $342-347 per tonne delivered on July 2, from $343-345 per tonne the previous week.
The slight increase in the three steel mills’ buy prices followed a reduction in supply in the market, sources said.
“Some suppliers held onto their material, expecting higher prices, and this made supply tighter,” a second Turkish source said. “So some mills had to increase their buy prices slightly to be able to secure more material.”
Cem Turken in Mugla, Paul Lim in Singapore and Thorsten Schier in New York contributed to this report.