WEEKLY SCRAP WRAP: Global scrap prices show mixed dynamics
The global scrap markets have shown mixed dynamics during the working week from Monday July 25 to Friday July 29, as Turkish prices slipped at the end of the week while Indian, Taiwanese and US prices advanced.
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Turkish steel mills continued to be very active in the deep-sea scrap markets this week and booked ten deep-sea cargoes, totalling 335,000 tonnes.
A steel producer in Iskenderun booked a US cargo, comprising 22,000 tonnes of HMS 1&2 (80:20) at $229 per tonne, 14,000 tonnes of shredded at $234 per tonne and 4,000 tonnes of P&S at $239 per tonne cfr, on July 29.
Another steel mill in Izmir booked a Baltic Sea cargo, comprising 15,000 tonnes of HMS 1&2 (80:20) at $229 per tonne, 15,000 tonnes of shredded at $234 per tonne and 5,000 tonnes P&S at $239 per tonne cfr.
And a mill in the Marmara region booked a European cargo, comprising 14,000 tonnes of HMS 1&2 (75:25), 7,000 tonnes of shredded and 19,000 tonnes of a mixture of HMS 1 and bonus at an average price of $230 per tonne cfr, also on July 29.
On July 27, a steel producer in the Marmara region booked a Baltic Sea cargo, comprising 21,500 tonnes of HMS 1&2 (80:20) at $229 per tonne and 3,500 tonnes of bonus at $239 per tonne cfr.
Another steel mill in the same region booked a US cargo, comprising 22,000 tonnes of HMS 1&2 (80:20) at $229 per tonne, 7,000-15,000 tonnes of shredded at $234 per tonne and 3,000 tonnes of bonus at $239 per tonne cfr.
A steel mill in Northern Turkey booked a Canadian cargo, comprising 25,000 tonnes of shredded and 25,000 tonnes of HMS 1&2 (90:10) at an average price of $233 per tonne cfr.
Another mill in the Marmara region also booked a Canadian cargo, comprising 40,000 tonnes of shredded and 10,000 tonnes of HMS 1&2 (90:10) at $233 per tonne cfr.
A final mill in the Iskenderun region booked a third Canadian cargo, comprising 15,000 tonnes of HMS 1&2 (90:10), 30,000 tonnes of shredded and 5,000 tonnes of bonus at an average price of $235 per tonne cfr.
On July 26, a steel producer in the Marmara region booked a European cargo, comprising 22,000 tonnes of HMS 1&2 (75:25), 11,000 tonnes of P&S, 5,000 tonnes of shredded and 2,000 tonnes of busheling, at an average price of $226 per tonne cfr.
A steel producer in Izmir booked a Baltic Sea cargo, comprising 22,000 tonnes of HMS 1&2 (80:20) at $228 per tonne, 8,000 tonnes of shredded at $233 per tonne and 2,000 tonnes of bonus at $238 per tonne cfr, on July 25.
However, supply was getting tighter with Turkish bookings, while demand was also getting slower, according to sources.
“Scrap prices are still firm, I believe, but finished steel demand is not supporting them. I believe the market will be relieved if Iskenderun mills sell some rebar next week,” a Turkish source said.
“I think prices will move sideways as demand is getting slower every day,” another Turkish source added.
The political upheaval in Turkey has not been disastrous for international scrap export prices, allowing a US East Coast exporter to secure a new order at higher prices earlier in the week.
“The market is quiet but stable. I don’t see anything dire that would change the markets at the moment,” a US West Coast exporter source said.
“I’m hoping to see more Turkish [trading] activity,” he added “The only concern is if Turkey’s business credit is compromised. Are the mills able to get the [letters of credit] opened if there is uncertainty?”
In fact, two bulk sales, one off each US coast, were made in the past week with no downward price movement in either market.
A South Korean producer booked 35,000 tonnes of HMS 1 at $225 per tonne cfr from a US West Coast exporter, the same price as the latest cargo sold to another South Korean buyer early this month.
Material flow at US scrapyards was severely limited, with intakes down by about 15-20%, according to a number of dealer sources.
Now that prices have returned to the levels seen in March, the reduction is not drawing scrap out into the supply chain. Summer slowness, coupled with an inactive export market, has left buying prices at export yards stable over the past two weeks.
“Everywhere I go, it is as dead as a doornail, and there’s not a whole lot of scrap on the ground,” a US East Coast dealer source said. “Nobody is moving anything. I think everybody learned over the past year or two how to run their business on a skinny level, so they are not in this terrible panic mode.”
Import prices for containerised HMS-grade scrap in Taiwan have moved up again, as local buyers continued to show resistance to rising offers.
Taiwanese mills have been resisting the latest uptrend in scrap import prices in Asia due to what they describe as a “very bad” domestic market for long steel, one Taipei-based trader said.
“Demand is weak as it’s summer here,” he said.
In the summer, local electric arc furnace (EAF) steelmakers operate only two daily shifts instead of the usual three, because of a seasonal electricity rationing programme on the East Asian island. This is to allow local energy suppliers to power air-conditioning systems.
Traders and mill sources reported limited bookings at $204-205 per tonne cfr this week for containerised cargoes from the West Coast of the USA.
“But most US suppliers want at least $210 [per tonne] cfr now,” a second trader said.
Taiwanese steelmakers currently have no alternative as bulk cargoes of H2-grade scrap from Japan have been offered at much higher prices of around $215-220 per tonne cfr.
Prices for containerised shredded scrap imported into India have increased this week, while those for HMS-grade material remained steady once again.
A tightening of supply for shredded scrap was reported by more than one market source.
“When there was a boom in prices a few months ago, people cleared out. Now they are sitting on low stocks,” one seller told Steel First.
But some were unconvinced that the tighter supply would result in higher prices in the market. “Because of holidays in Europe and the USA, supply is tight. But this will make no difference to the price in India,” a second seller said.
Offers were heard for USA- and UK-origin shredded material into India at $220-225 per tonne cfr Nhava Sheva, while bids for similar material were heard at $215-220 per tonne cfr Nhava Sheva.
A deal for shredded scrap was conducted at $222 per tonne cfr Nhava Sheva this week.
Meanwhile, the HMS-grade scrap price remained stable this week.
The market was characterised by a stand-off between buyers and sellers, which has resulted in a lack of business being concluded.
“For HMS, there are no offers because of the monsoon season,” one buyer said.
“Material has been offered but there is no buying activity,” a third seller said.
Another seller said that it “doesn’t make sense” to even offer material to the market, as he had already held discussions with buyers who had made it clear that they would only pay $190-195 per tonne cfr Nhava Sheva for his South Africa-origin material.
Ideally, he was looking for around $220 per tonne cfr Nhava Sheva, he added.
South African material was also heard offered to the market at $210 per tonne cfr Nhava Sheva, but “there is absolutely no buying interest in India” at these prices.
While most market participants do not believe that there is likely to be any significant change in prices for scrap imported into India until the end of August, some spoke of factors that could influence the price soon.
Sources said that current prices for direct reduced iron (DRI) are continuing to make imported scrap unattractive to many buyers.
Turkish domestic scrap prices increased in line with strengthening imported scrap values at the beginning of the week, as a number of steel mills in the country raised their purchasing prices.