WEEKLY SCRAP WRAP: Global scrap prices surge amid firm demand
Scrap prices in the major global markets continued to increase during the working week from Monday July 3 to Friday July 7, as demand in the import markets remained firm.
Turkey booked a number of cargoes from US, Baltic Sea and European suppliers, elevating prices in all regions, while the Taiwanese and Indian import markets followed a similar trend.
Turkish steel producers started their August bookings on Wednesday July 5 and booked ten deep-sea cargoes by Friday.
A steel mill in Northern Turkey booked a European cargo, comprising 15,000 tonnes of HMS 1&2 (75:25), 10,000 tonnes of shredded, 7,500 tonnes of P&S and 500 tonnes of new cuttings at an average price of $299 per tonne cfr.
Another steel mill in the Marmara region booked a Baltic Sea cargo, comprising HMS 1&2 (80:20) at $296 per tonne, shredded at $301 per tonne and bonus at $306 per tonne cfr.
A steel producer in the Marmara region booked a US cargo, comprising 30,000 tonnes of HMS 1&2 (80:20) at $296 per tonne and 10,000 tonnes of shredded at $304 per tonne cfr.
The same mill booked a European cargo, comprising 10,000 tonnes of HMS 1&2 (75:25), 12,000 tonnes of shredded, 10,000 tonnes of a mixture of P&S and HMS 1, 2,000 tonnes of P&S and 4,000 tonnes of a mixture of bundles and busheling, all at an average price of $299 per tonne cfr.
A steel mill in the Iskenderun region booked a Baltic Sea cargo, comprising 30,500 tonnes of HMS 1&2 (80:20) at $294 per tonne and 3,500 tonnes of bonus at $304 per tonne cfr.
The same mill booked a European cargo, comprising 5,000 tonnes of HMS 1&2 (75:25) at $286.50 per tonne, 13,500 tonnes of shredded and 10,000 tonnes of HMS 1 at $296.50 per tonne, and 3,000 tonnes of P&S at $301.50 per tonne cfr.
The same mill also booked a second European cargo at $291 per tonne for HMS 1&2 (80:20), $296 per tonne for shredded and 301 per tonne cfr for bonus. However, the tonnages of this cargo were not known.
A steel mill in the Izmir region booked a Baltic Sea cargo, comprising 7,500 tonnes of HMS 1&2 (80:20) at $295 per tonne, 18,000 tonnes of shredded at $300 per tonne and 5,500 tonnes of a mixture of bonus and busheling at $305 per tonne cfr.
Another steel mill in the Iskenderun region booked a US cargo, comprising 20,000 tonnes of HMS 1&2 (80:20) at $298 per tonne, 10,000 tonnes of shredded at $304 per tonne and 10,000 tonnes of bonus at $310 per tonne cfr.
And a steel producer in the Marmara region also booked a US cargo from the same supplier, comprising 20,000 tonnes of HMS 1&2 (80:20) at $296 per tonne and 20,000 tonnes of shredded at $301 per tonne cfr.
US ferrous scrap exporters delivered a welcome surprise, with two higher-priced sales to Turkey boosting sentiment in the market.
These two cargoes traded at prices $6-8 per tonne higher than two other sales struck by a US supplier and a second exporter late last week.
The positive turn of events in the export sector generated more bullishness among scrap dealers on the north-east coast of the USA.
Mills in this region have yet to begin trading, but domestic scrap demand in this area is expected to be good for July.
“The Turks are still in the market and the Indians are starting to sniff around for bulk and containers, which could put pressure [on domestic US prices] from two angles,” a trading source said.
“I’m not bullish enough to think that it’ll be a runaway market, but the momentum that US steel mills had last week is gone,” he added.
Taiwan’s import prices for containerised HMS-grade ferrous scrap have gone up over the past week, following the upward move in the Turkish market, the world’s largest buyer of the material.
But this growth was said to be limited due to the weakness in Taiwan’s own domestic steel demand.
“The Taiwanese steel mills can’t fully pass on the higher scrap prices to their end-users as the demand for the long products they make is slow,” a local trader said. “However, the local producers understand that there is an uptrend in the international scrap market, so they are starting to accept the higher prices – but slowly,.
Market participants blamed the weakness of steel demand in the Taiwanese market on the rainy season, as well as the absence of any large infrastructure projects.
Metal Bulletin’s price assessment for imports of USA-origin HMS 1&2 (80:20) into Taiwan was $250-260 per tonne cfr for the week ending Friday July 7, inching up by $5 per tonne on the higher end from $250-255 per tonne cfr last week.
Deals were heard done at $258-260 per tonne cfr Taiwan. And there was also some business heard clinched at $250 per tonne cfr, either earlier this week or late last week.
Offers for USA-origin HMS 1&2 (80:20) were heard mainly at $260 per tonne cfr Taiwan. Bids were heard between $253 and $258 per tonne cfr.
“Not many import offers were heard this week, as the sellers expect a further [price] rise,” a trader said, noting that Japanese scrap had already been offered to Taiwan at higher prices.
Offer prices for Japanese H2-grade bulk cargoes were heard at $270-275 per tonne cfr this week in Taiwan, according to sources.
Prices for shredded scrap arriving in containers in India moved up this week although the markets were kept quiet by uncertainty over the country’s new goods & services tax (GST).
Metal Bulletin’s index for containerised shredded scrap imports in India was $311.06 per tonne cfr Nhava Sheva on Friday, up by $7.85 per tonne week-on-week, compared with $303.21 per tonne cfr last week.
India’s import shredded market was buoyed by strengthening in Turkish bulk scrap prices this week, but gains in Indian import prices were limited by a lack of buying, sources told Metal Bulletin.
“With the GST, it should take another ten days to settle,” one seller said.
“The market is slow. Some people […] don’t know how [the GST] works,” another seller said.
Markets were also being kept quiet by what some sources saw as uncompetitive scrap prices.
“International prices are higher than [domestic ones in] India today so there are exports, but imports are out of the question,” the seller said.
One deal for 1,500 tonnes of UK-origin shredded material was heard made at $312 per tonne cfr Nhava Sheva this week.
Offers for UK- and USA-origin material were heard at $315 per tonne cfr Nhava Sheva, while bids for similar material were heard at $300-305 per tonne cfr.
Turkish domestic scrap prices pushed up at the beginning of the week, in line with rising imported scrap values.
Nadia Popova in Moscow, Lee Allen in London and Mei Ling Toh in New York contributed to this report.