WEEKLY SCRAP WRAP: Global prices down as trading activity slips
Global scrap prices weakened in most markets except Taiwan during the working week from Monday July 9 to Friday July 13, amid sluggish demand in the major regions.
Turkey resumed its deep-sea bookings for August deliveries but at lower prices, which sent the US East Coast export prices down, while the weak demand continued to affect prices in India.
But import scrap prices into Taiwan remained stable this week on moderate levels of demand.
The steel mills in Turkey started their deep-sea purchases for August deliveries on July 10 and booked six deep-sea cargoes.
But the mills were still tentative due to poor demand in the country’s local and export long steel markets.
Four deep-sea cargoes were heard traded on July 10, which sent the daily scrap indices down by $3.14-5.98 per tonne on the day.
A steel mill in the Izmir region booked a US cargo, comprising 32,000 tonnes of HMS 1&2 (80:20) at $348 per tonne, 7,000 tonnes of shredded at $358 per tonne and 3,000 tonnes of bonus at $363 per tonne cfr.
A steel mill in the Marmara region booked another US cargo, comprising HMS 1&2 (80:20) at $344 per tonne, shredded at $354 per tonne and bonus at $359 per tonne cfr. The cargo breakdown was not clear but cargoes sold out of the US generally total around 40,000 tonnes.
The same mill booked a second US cargo, comprising 36,000 tonnes of HMS 1&2 (80:20) at $343 per tonne and 4,000 tonnes of bonus at $358 per tonne cfr.
Another steel mill in the Iskenderun region booked a European cargo, comprising 23,000 tonnes of HMS 1&2 (75:25), 10,000 tonnes of shredded and 7,000 tonnes of a mixture of plate and structural scrap (P&S) and HMS 1 at an average price of $347.50 per tonne cfr.
The Turkish mills returned to the market and booked two more deep-sea cargoes, one late on Wednesday and another on Thursday, which sent the daily scrap indices down by a further $3.73-4.87 per tonne on July 12.
A steel producer in the Iskenderun region booked a Canadian cargo, comprising 25,000 tonnes of HMS 1&2 (90:10) and 25,000 tonnes of shredded, at an average price of $350.50 per tonne cfr late on July 11.
The same mill booked a European cargo on July 12, comprising 32,000 tonnes of HMS 1&2 (80:20) at $335.50 per tonne and 8,000 tonnes of bonus at $350.50 per tonne cfr.
The mills in the country then went quiet again on Friday, amid slow buying activity for finished steel. “Turkish mills have started their August bookings but are still cautious because of the weak rebar demand,” a Turkish source said.
Prices for US exports of HMS-grade scrap to Turkey dropped by as much as $10 per tonne in three lower-priced cargoes reported on July 10, while the bulk scrap market off the US West Coast remained quiet.
As a result of the sales to Turkey, American Metal Market’s US East Coast ferrous scrap index for HMS-grade scrap fell to $324.26 per tonne fob New York, down from $332.50 per tonne a week earlier.
The US West Coast ferrous scrap index for similar material stayed flat at $332 per tonne fob Los Angeles, with no export sales heard among US and Asian traders.
“I think the price downtrend is going to last until August. I heard Turkish mills have enough scrap inventory, compared with their sales and production,” one US scrap trader said, who mostly trades in Asia and does not deal directly with Turkish mills.
“I think the markets are relatively stable, but with a kind of negative outlook, given lower Turkish rebar prices and so on,” one seller into Boston yards said, whose latest HMS-grade deals were secured at $290 per gross ton.
And given that cfr prices into Turkey have dropped from roughly $355 per tonne cfr to $345 per tonne cfr, exporters may reduce their dock prices accordingly, he added. But he noted that exporters are not likely to reduce their buying prices by much more than $10 per gross ton in the near term.
Import prices for containerized HMS in Taiwan remained unchanged this week on tepid demand.
US-origin scrap continued to be offered at $340-345 per tonne cfr Taiwan, the same price as last week. And deals were concluded at $335-340 per tonne cfr Taiwan, also unchanged.
Demand was described by end-user sources as “mild” while the unclear price direction discouraged mills from stocking up on large amounts of the steelmaking raw material.
“Traders and sellers are not sure where the price will head next, so negotiations have remained at levels similar to last week,” an end-user source said.
Bids for US-origin containerized cargoes were around $335 per tonne cfr Taiwan. Negotiations were still being done around $335-340 per tonne cfr Taiwan.
“Buyers are not willing to increase their bids because they do not see firm reasons for prices to increase,” a Taiwanese trader said. This was due to the continuing weakness in fundamental demand for downstream long steel products such as rebar and beams.
Japanese bulk cargoes of HMS 1&2 (50:50) were offered to Taiwan at $353-355 per tonne cfr, sources said, adding that deals were concluded at $350-353 per tonne cfr.
Prices for imports of containerized shredded scrap into India have dropped by almost $10 per tonne this week because demand has been flat.
Shredded prices have remained range-bound since early June in the range of $380-382 per tonne cfr Nhava Sheva, with little change between June 8 and July 6.
One deal for UK-origin shredded was heard at $370 per tonne cfr Nhava Sheva this week, while offers were in the range of $370-375 per tonne cfr, down from last week’s range of $380-387 per tonne cfr.
“There is no buying - no one is interested in buying at this price. The market has panicked. India will not be in the market for another month or two,” a trader said.
The current monsoon season in India continued to have an effect on demand this week, and has halted construction activity in the country.
“The market is very quiet [amid] difficult conditions. We don’t know what is happening. Domestic prices are volatile [so] it’s a difficult time,” a second trader said.
Meanwhile, HMS 1&2 (80:20) from the Middle East was offered at $350 per tonne cfr, down from $365 per tonne cfr last week, and UK-origin material was available at $325 per tonne cfr, down from $345 per tonne cfr last week.
A fall in Turkish scrap prices also affected the Indian market. “There is some pressure on pricing at the moment, especially given the latest [HMS-grade scrap] sales in Turkey,” a third trader said.
Turkish domestic auto bundle (DKP grade) scrap prices strengthened in the week ended July 9 with improving demand at the beginning of the week, while prices for shipbreaking scrap only shifted sideways.
A number of steel mills and a major scrapyard increased their buy prices for auto bundle scrap.
The main reason for the rise in auto bundle scrap prices was the Turkish producers’ weak demand for imported material.
“The mills are trying to secure more domestic scrap to be able to extend their silence in the deep-sea scrap markets, and to put downward pressure on import prices,” a Turkish source said.
Carrie Bone in London, Paul Lim in Singapore and Nat Rudarakanchana in New York contributed to this report.