WEEKLY SCRAP WRAP: Global prices continue to rise amid stronger demand
Global scrap prices continued to climb with increasing demand in the major import markets during the working week from Monday June 26 to Friday June 30.
Turkey came back from the post-Ramadan holiday of Eid Al-Fitr on June 28 and continued to book deep-sea scrap for July, as the country’s domestic rebar market was still strong and export demand was expected to recover soon.
Turkish steel producers came back from the holiday in the middle of the week and booked six deep-sea cargoes from various sources at escalating prices within three days.
A steel mill in the Marmara region booked a European cargo, comprising 24,000 tonnes of HMS 1&2 (75:25), 7,000 tonnes of shredded, 7,000 tonnes of bonus and 2,000 tonnes of busheling at an average price of $292 per tonne cfr on June 30.
The same mill also booked a 35,000-tonne Baltic Sea cargo, comprising HMS 1&2 (80:20) at $290 per tonne, HMS 1&2 (90:10) and shredded at $295 per tonne and bonus at $300 per tonne cfr.
A mill in the Iskenderun region booked another Baltic Sea cargo, comprising 27,000 tonnes of HMS 1&2 (80:20) at $290 per tonne and 8,000 tonnes of bonus at $300 per tonne cfr on June 29.
Another steel producer in the Iskenderun region booked a third Baltic Sea cargo, comprising 19,000 tonnes of HMS 1&2 (80:20) at $290 per tonne, 3,500 tonnes of shredded at $295 per tonne and 3,500 tonnes of bonus at $300 per tonne cfr on June 28.
A steel producer in the Izmir region booked a US cargo, comprising 30,000 tonnes of HMS 1&2 (80:20) at $287 per tonne, 5,000 tonnes of shredded at $292 per tonne and 5,000 tonnes of P&S at $297 per tonne cfr.
Another steel mill in the Iskenderun region booked a second US cargo, comprising 13,000 tonnes of HMS 1&2 (80:20) at $290 per tonne, 10,000 tonnes of shredded at $295 per tonne and 7,000 tonnes of P&S at $300 per tonne cfr on June 28.
“The domestic rebar market is still strong as construction activity in the country is firm,” a Turkish source said. “Market participants expect the export market to follow soon as Ramadan is over now.”
Immediately after the Eid Al-Fitr holiday, Turkish steel mills booked two deep-sea cargoes from the US East Coast at $290 per tonne cfr for HMS 1&2 (80:20).
These two sales were priced $10-13 per tonne higher than a June 14 cargo sale of HMS 1&2 (80:20) that changed hands at $277 per tonne cfr.
“Bulk prices are up and container prices are pushing upward too. It seems like dock levels are off and there’s limited inventory at the export yards. We may actually see exporters finally push their numbers up after holding them [steady] for a while,” a trader source said.
While Turkey has not been particularly active in the US export market this month, bulk sales have been made to other nations, although details of these transactions have been elusive.
A 30,000-tonne cargo of shredded scrap was booked by a Peruvian mill from the US East Coast in recent weeks at an unknown price.
Meanwhile, talk of more unconfirmed bulk ferrous scrap cargoes traded from the US West Coast to Bangladesh surfaced this week, although sources varied in what they said of the exact number of cargoes booked.
Some believed only four or five cargoes were sold from the West Coast, but others speculated that there were seven or eight cargoes shipped to the emerging nation.
Three West Coast exporters were rumoured to have sold the cargoes, which are believed to have changed hands at $295-305 per tonne cfr.
“Pakistan, India and Bangladesh have been pulling in a lot of bulk cargoes, which is not the usual trade flow. Some of the induction furnaces in these markets have been able to come together and pull more scrap in. That is interesting [as] these markets have traditionally been buyers [of scrap in containers],” a trader source said.
Import prices for ferrous scrap in India have increased over the past week despite limited trading activity before the announcement of a decision on reform of the country’s tax system.
Market participants were reported to have made a few deals for small quantities of scrap before India’s general sales tax (GST) comes into force on July 1.
Demand is expected to recover over the following week, as mills have limited volumes of material and they need to restock.
In the meantime, the potential jump in ferrous scrap buying activity is threatened by seasonally low demand for finished steel products.
In addition, some sources said that the price of direct reduction iron (DRI) was low in India, and as a result, the volumes of imported scrap might not go up as much as was expected.
The price rise for ferrous scrap in India was supported by the positive trend in the Turkish ferrous scrap market.
Maria Tanatar in Dnepr and Mei Ling Toh in New York contributed to this report.