WEEKLY SCRAP WRAP: Global prices dip on weak downstream demand
Global scrap prices softened in several markets in the working week from Monday July 23 to Friday July 27, often because of weak demand in the downstream long steel segments in Taiwan and Turkey.
Exporters in the United States saw prices dip when their customers in Taiwan and Turkey continued to bid lower prices for their material.
And the discovery of a volume of cocaine by Vietnamese authorities at Tan Cang Cai Mep-Thi Vai Port in southern Vietnam - the drugs were discovered in a scrap shipment - had sellers diverting their containerized scrap cargoes to other locations, resulting in an increase in supply in other areas of Asia.
This has had the effect of damping prices in several markets, scrap traders said.
A steel mill in the Marmara region booked a US cargo on Thursday, comprising 30,000 tonnes of HMS 1&2 (80:20) at $339 per tonne, 5,000 tonnes of shredded at $349 per tonne and 5,000 tonnes of bonus at $354 per tonne cfr.
This deal compared with two transactions from the US East Coast on July 19-20, which had HMS 1&2 (80:20) at $340 per tonne cfr and shredded at $350 per tonne cfr.
Turkish steel producers have been active in the deep-sea scrap markets only in short bursts this week, because of the poor demand for rebar.
The mills in the country went quiet on Tuesday after booking two cargoes from the US and Europe on July 23, totaling 55,000 tonnes, in addition to two European cargoes booked at the end of last week, which totaled 70,000 tonnes.
Turkish steel mills have continued to book deep-sea scrap for August deliveries but with little change in prices, and have now begun booking for September deliveries, sources said on July 27.
Two scrap cargoes sold out of the US to Turkey were heard on July 26, with prices across key grades easing downward by as much as $5 per tonne.
An East Coast exporter sold a cargo to Turkey comprising 30,000 tonnes of HMS 1&2 (80:20) at $339 per tonne, 5,000 tonnes of shredded at $349 per tonne and 5,000 tonnes of bonus at $354 per tonne cfr.
A second cargo to Turkey was heard later the same day, but at prices down by $5 per tonne from similar sales last week.
That second cargo, sold by a different US exporter, comprised 10,000 tonnes of HMS 1&2 (80:20) at $335 per tonne, 15,000 tonnes of shredded at $345 per tonne and 5,000 tonnes of bonus at $355 per tonne cfr, for September shipment.
A Turkey-bound cargo came to light on July 23, sold at a price similar to that of a cargo reported on July 20, market participants said.
This cargo carried 14,000 tonnes of HMS 1&2 (80:20) at $340 per tonne cfr, 8,000 tonnes of shredded at $350 per tonne cfr and 8,000 tonnes of bonus at $355 per tonne cfr. This material was shipped by the same US exporter that sold a 40,000-tonne cargo late last week at identical prices.
Import prices for containerized HMS-grade scrap in Taiwan softened further this week on ample supply and poor end-user demand.
US-origin scrap was offered at $335 per tonne cfr Taiwan this week, the same as last week. Bids were made at $330 per tonne cfr Taiwan.
Deals involving US scrap were concluded at $333-335 per tonne cfr Taiwan, compared with $335 per tonne last week.
An end-user source said that it had successfully concluded a deal at $330 per tonne cfr Taiwan, but this could not be confirmed at the time of publication.
Supplies of containerized scrap from the US remained ample, with numerous sellers attempting to sell cargoes, but end-users did not have any immediate need for imports.
“End-users have mostly purchased sufficient volumes and their inventory levels are quite high,” a source at another steel mill in Taiwan said.
The cocaine drugs haul found in a scrap shipment by authorities in southern Vietnam induced sellers to divert their container scrap cargoes to other locations, resulting in an increase in supply in Taiwan.
This exacerbated the oversupply of scrap in Asia, especially after Vietnam’s customs authorities had earlier stepped up checks on scrap import cargoes in an attempt to control pollution.
And higher bids by South Korean importers Hyundai Steel and Dongkuk Steel have failed to bolster prices.
Market sources said that the continual downward trend in import prices in Turkey - a key barometer for the Asian scrap market - had caused negotiating levels to come down.
“Some more softening in ferrous scrap prices in Asia is expected because there is no strong fundamental demand expected in the near term,” an industry source said.
Bulk cargoes of Japan-origin HMS 1&2 (50:50) were offered at $350-355 per tonne cfr Taiwan, a second Taiwanese trader said, but no transactions were heard.
Prices for containerized shredded scrap imported into India have fallen by almost $10 per tonne this week due to reduced offer prices, sources told Metal Bulletin on July 27.
Metal Bulletin’s weekly index for containerized imports of shredded scrap into India dropped by $9.01 per tonne to $355.27 per tonne cfr Nhava Sheva on Friday, from $364.28 per tonne cfr Nhava Sheva on July 20. This week’s price was the lowest seen so far this year.
One deal for shredded was reported at $350 per tonne cfr Nhava Sheva this week, while other deals heard ranged from $355 to $370 per tonne cfr.
“It will stay like this for two more weeks. [Buyers] will need to book material soon [but for now] there are no buyers - they are out of the market, waiting and watching,” a seller said.
“The markets are slow due to the monsoon season. And local scrap [prices] continue to be cheaper than imports,” a buyer said.
The Indian market has seen prices come down throughout July due to the monsoon season in the country, as well as the weak Turkish market which added further downward pressure on prices. Domestic prices in India have also remained low, reducing the attraction of imports.
The price of Turkish domestic auto bundle scrap was steady over the week ended July 23, while the price of ship scrap rose slightly because of improved demand from a steel mill in Izmir, sources said on Monday.
The steel producer in the Izmir region raised its buying price for ship scrap by $5 per tonne to $345 per tonne delivered, while other steel mills in that region kept their buy prices unchanged at $345 and $347 per tonne delivered.
Metal Bulletin’s weekly price assessment for Turkish domestic melting scrap from shipbreaking therefore narrowed upward to $345-347 per tonne delivered on July 23, from the previous week’s $340-347 per tonne.
Meanwhile, the price of auto bundle scrap remained stable. A single mill changed its buying price over the week but it remained within the prevailing range.
Long steel producer IDC increased its buying price by TRY20 per tonne to TRY1,550 ($321) per tonne delivered.
Metal Bulletin’s price assessment for auto bundle material remained unchanged week-on-week on July 23 at TRY1,510-1,680 per tonne delivered.
Carrie Bone in London, Nat Rudarakanchana in New York and Cem Turken in Mugla contributed to this report.