WEEKLY SCRAP WRAP: Global scrap prices mostly down on thinner trade, weaker demand
Global ferrous scrap prices were mostly going down during the working week ended Friday April 27 due to thinner trading and weaker demand.
A public holiday in Turkey reduced the demand for bulk cargoes, while a slight pickup in daily prices toward the end of the week did not boost week-on-week price changes. The weak bulk export sales in the United States added downward pressure to bulk prices, compared with last week.
Even though a lack of US-origin cargoes caused containerized Taiwanese import prices to rise, an ample supply of Japan-origin scrap capped any gains. The India shredded market also saw week-on-week drops due to buyers just returning to the spot market this week.
The Turkish deep-sea scrap market had been quiet in the earlier part of the week due to a national holiday.
Steel producers returned to the deep-sea scrap markets for UK-origin cargoes on April 25, with prices going down slightly after the trading of deep-sea cargoes heard that day.
A steel producer in the Marmara region booked two 45,000-tonne UK cargoes at $340 per tonne cfr for HMS 1&2 (80:20) on April 25.
Another steel mill in the Iskenderun region also booked a UK cargo, late on April 24, comprising 35,000 tonnes of HMS 1&2 (80:20) at $348 per tonne, 5,000 tonnes of shredded at $353 per tonne and 5,000 tonnes of bonus at $358 per tonne cfr.
Turkish steel mills continued their deep-sea scrap bookings for May deliveries at slightly higher prices on Friday. Mills in the country booked six deep-sea cargoes from various regions, totaling around 180,000 tonnes.
A steel mill in the Izmir region booked a Baltic Sea cargo, comprising 23,500 tonnes of HMS 1&2 (80:20) at $351.50 per tonne, 5,500 tonnes of bonus at $361.50 per tonne and 1,000 tonnes of rail at $366.50 per tonne cfr.
The same mill booked a second Baltic Sea cargo from a different supplier, comprising 23,000 tonnes of HMS 1&2 (80:20) at $352 per tonne, 5,500 tonnes of shredded at $357 per tonne and 6,500 tonnes of bonus at $362 per tonne cfr.
A steel mill in the Marmara region booked a European cargo, comprising 20,000 tonnes of HMS 1&2 (75:25), 10,000 tonnes of a mixture of HMS 1 and plate and structural scrap (P&S) and 5,000 tonnes of shredded, at an average price of $345 per tonne cfr.
Another steel producer in the same region booked a US cargo, comprising 17,500 tonnes of HMS 1&2 (90:10) at $352 per tonne and 5,500 tonnes of shredded at $357 per tonne cfr.
A steel mill in the Iskenderun region booked a US cargo, comprising 18,000 tonnes of HMS 1&2 (90:10) at $355 per tonne, 4,000 tonnes of shredded at $359 per tonne and 8,000 tonnes of bonus at $364 per tonne cfr.
A third steel mill in the Marmara region also booked a US cargo, comprising HMS 1&2 (80:20) at $353 per tonne, shredded at $358 per tonne and P&S at $363 per tonne cfr. The breakdown of this cargo could not be confirmed at the time of publication.
US ferrous scrap export prices were stable on the country’s East Coast, but export yard buying prices were being pressured by expectations that obsolete grades could face reductions in May’s domestic trading.
No fresh bulk sales have been transacted from either the US East or West Coast in the past seven days. Turkey returned to the deep-sea market on April 25, booking three European cargoes.
But even though these European deals were done in the $340s-per-tonne range, sources said that US cargoes of HMS 1&2 (80:20) were still being offered at $352-360 per tonne cfr. US cargoes are usually priced higher than European cargoes by $10 per tonne.
Lackluster bulk export sales were exerting pressure on export yard buying prices along the East Coast. Philadelphia exporters were the first to give in, lowering their average buying prices for HMS 1 by $5 to $305 per gross ton, according to American Metal Market’s assessment on April 25.
Prices for similar material in Boston and New York were exhibiting signs of stress, but average prices still held at $305 and $300 per ton respectively.
Meanwhile, prices for containerized shredded scrap on the East Coast were stable even though delivered prices to India corrected upward. Market participants put prices at $340-350 per tonne fas, unchanged from a week ago, while containerized shredded was trading to India and Pakistan at $385-400 per tonne cfr.
An export source said that the market was “chaotic” late in the previous week because one Asian mill attempted to push prices downward, announcing that it had secured containerized HMS 1&2 (80:20) at $340 per tonne cfr.
An Asian trader source said that containerized H2-grade scrap from Japan was being offered to Vietnam at $350-355 per tonne cfr but failed to draw interest among buyers. But containerized HMS 1&2 (50:50) traded successfully to Vietnam at $342 per tonne cfr.
Prices for containerized shredded scrap imported into India were stable this week with buyers returning to the market following a lull in activity, sources told Metal Bulletin on April 27.
Metal Bulletin’s weekly index for containerized imports of shredded scrap into India was largely unchanged this week at $385.15 per tonne cfr Nhava Sheva on April 25, down by $0.29 week-on-week, compared with $385.44 per tonne cfr last week.
Deals were heard at $385-390 per tonne cfr Nhava Sheva for material from the UK and Europe during the week, including transactions for 3,000 tonnes and two 2,000-tonne lots.
One trader described demand from Europe as “strong and stable.” One seller said that prices this week were at similar levels to last week, and a trader agreed.
Shredded containerized prices were now similar to bulk prices, and this meant that some were choosing to buy bulk material instead, according to one seller.
“If the prices for shredded are the same as for bulk, then buyers would rather go with [bulk] because it’s easier to buy and [involves] less paperwork,” a trader said.
One trader said that $385 per tonne had become the benchmark price for shredded material in the Indian market, but other traders did not agree.
“I’m waiting for the right price to sell. I’m not selling at $385 per tonne, I’m looking for $395-400 per tonne. I’m not sure when this will happen; I’m waiting for the right offers,” a trader said.
“The market will stay as it is. Prices have bottomed out but I don’t see them falling,” a second trader said.
The market concern over the falling value of the Indian rupee against the dollar continued this week, with one trader saying that it had “put a spanner in the works.”
The official exchange rate was $1 to 66.90 rupees on April 27, compared with $1 to 65.80 rupees on April 20, according to website Oanda.com.
“People are taking the fall of the Indian rupee into their price consideration, because it might fall further,” a seller said.
“With the exchange rate [going down], it makes quite a difference [to prices],” a second seller said.
“People are very wary about what’s going to happen [with the currency],” a trader said,
Import prices for containerized HMS-grade scrap in Taiwan increased this week because sellers in the US took the chance to raise prices and limit offers.
Metal Bulletin’s price assessment for imported US-origin HMS 1&2 (80:20) in Taiwan was $340-343 per tonne cfr for the week ending April 27, up by $8-10 per tonne from a week earlier.
US-origin scrap was on offer at $340-343 per tonne cfr Taiwan, up by $3-5 per tonne from the preceding week.
Traders said there were fewer offers for US-origin scrap this week because sellers were holding out for better prices on bullish sentiment in the spot market.
Scrapyards in the US have an optimistic view of the domestic US markets following discussions at a major recycling conference last week. They left with the feeling that the US markets were performing better than the Asian markets, market sources said.
Buyers were bidding $335 per tonne cfr Taiwan and hoping to secure volumes for less than $340 per tonne cfr Taiwan.
But there were only limited transactions involving US-origin containerized scrap, with buyers looking to purchase Japan-origin HMS 1&2 (50:50) instead. This was due to there being more supplies of Japan-origin scrap in the spot market.
Market sources said that major South Korean buyer Hyundai Steel had reduced its purchase volumes and this had led to more Japan-origin scrap being offered to Taiwan. Japan-origin HMS 1&2 (50:50) was offered at $350-355 per tonne cfr Taiwan, with some volumes sold to major Taiwanese buyers.
Purchasing of ferrous scrap is expected to pick up once downstream end-users start negotiations for June-shipment materials.
Turkish domestic prices for ferrous scrap from shipbreaking went up slightly during the week that ended on April 23, while domestic auto bundle scrap prices were largely stable, sources said on April 24.
Metal Bulletin’s weekly price assessment for melting scrap from shipbreaking in the Turkish domestic market was $348-355 per tonne delivered, up from the previous week’s $341-352 per tonne.
The upward movement in the weekly assessment came after long steel mill Habas raised its buy price to $355 per tonne, while fellow long steel mills Ege Çelik and Özkan raised their prices to $348 per tonne.
In the meantime, domestic auto bundle scrap prices remained stable with most steel mills and a major scrapyard in Izmir keeping their prices unchanged. One steel mill raised its buy price for the material by TRY40 ($10) per tonne.
But Metal Bulletin’s weekly price assessment for domestic auto bundle scrap (DKP grade) in Turkey was unchanged week-on-week at TRY1,270-1,500 ($312-368) per tonne delivered.
Cem Turken in Mugla, Carrie Bone in London and Mei Ling Toh in New York contributed to this report.