WEEKLY SCRAP WRAP: Global scrap prices up except in USA
Global scrap prices pushed up in the working week from Monday June 5 to Friday June 9, except on the US East Coast.
Turkish mills continued their deep-sea purchases on a slow pace due to Ramadan lull, while the Taiwanese import market faces higher offers from USA and Japan.
Turkish steel producers booked only four deep-sea cargoes so far this week, totalling around 100,000 tonnes.
A steel mill in the Iskenderun region booked a US cargo, comprising 12,000-17,000 tonnes of P&S at $287 per tonne, 5,000-10,000 tonnes of shredded at $279 per tonne and the balance of the 40,000-tonne cargo is HMS 1&2 (80:20) at $274 per tonne cfr on June 6.
A steel mill in the Marmara region booked two UK cargoes, each one comprised 20,000 tonnes of HMS 1&2 (80:20) at $269 per tonne cfr on June 8.
The same mill booked a third UK cargo, comprising 25,000 tonnes of shredded at $278 per tonne cfr.
Meanwhile, a steel mill in the Izmir region booked an additional 6,000 tonnes of HMS 1&2 (80:20) from a Baltic Sea supplier for its previous transaction traded at $271 per tonne cfr on June 8.
The Turkish export market for finished steel products slowed down with the Islamic holy month of Ramadan as usual, but the mills continued to book scrap with strong domestic finished steel demand.
“I think Turkish mills are still enjoying the domestic rebar demand. They increase their output and continue to book more deep-sea scrap,” a Turkish source said.
News of a fresh bulk ferrous scrap export deal from the US East Coast to Turkey at higher prices surfaced on June 7.
Turkey’s sporadic buying patterns and lacklustre demand due to the onset of Ramadan have left little visibility on the near-term direction of prices in the deep-sea market.
Sources differ on their outlooks for the export sector, with some saying that trading activity is picking up while others argue that prices might soon come under pressure.
Despite the market silence during the first half of this week, one exporter is rumored to have multiple bids from Turkey on the table for July-delivery cargoes. Another US exporter is said to have delivered a full cargo of shredded scrap to Mexico recently, which triggered chatter that Mexican buyers might be back for more.
Yet US trader sources are less optimistic in their assessment, citing the weakening European scrap market and the Turkish government’s intention to reduce duties on the country’s rebar imports as points for concern.
“The Turkish domestic rebar market is doing really well, but their exports are not. That is what’s holding up prices right now,” a trader source said. “The Turkish government may halve duties on rebar imports, but the final decision is not until Friday.”
European scrap prices have slipped, which could have a negative impact on offer prices for European cargoes to Turkey, a second trader source said.
Import prices for containerised HMS-grade ferrous scrap in Taiwan have increased for the second week, as suppliers from the USA continued to raise their offers, supported by higher prices from Japan.
Small cargoes from suppliers on the US West Coast were heard booked as low as $245 per tonne cfr Taiwan earlier in the week, moving up to $248-250 per tonne cfr Taiwan by the end of the week, several traders and buyer sources said.
There were unconfirmed talks about one or more buyers even accepting small volumes at just above $250 per tonne cfr on Friday.
The higher prices received extra support on Friday following the results of the Kanto Tetsugen monthly ferrous scrap export auction in Japan.
A total of 20,000 tonnes of H2-grade scrap was sold at an average of ¥25,525 ($232) per tonne fas at the auction, ¥790 ($7) per tonne more than the average selling price for previous month.
“The domestic market in Japan is very strong now, so [Japanese] suppliers are increasing their prices,” a source at a Taiwanese electric arc furnace (EAF) mill said on Friday.
Indicative offer prices for Japanese H2-grade bulk cargoes moved up to around $265-270 per tonne cfr on the day, up from around $250-255 per tonne cfr last week.
Prices for containerised import scrap in India have been stable over the past week amid the lacklustre demand, as buyers awaited more clarity on the new tax regime.
Uncertainty over a significant Indian tax reform was said to make Indian buyers delay purchases until more clarity appears, and de-stock their inventories in the meantime, sources said.
The Goods & Services Tax (GST), which is expected to come into force by the first day of July, is designed to bring together a host of existing taxes and should make it easier to move goods between Indian states.
Metal Bulletin’s index for containerised shredded scrap imports in India inched down by $0.98 per tonne over the past week to finish Friday June 9 at $294 per tonne cfr Nhava Sheva.
Offers for shredded scrap from the USA stood at $290 per tonne cfr Nhava Sheva.
UK-origin scrap was on offer at $295-300 per tonne cfr, while other EU-origin material offers were said to be raching $300-310 per tonne cfr Nhava Sheva.
Bids, of which there were few, were heard at $285-290 per tonne cfr Nhava Sheva.
Sellers were not open for much bargaining, sources said.
“EU and UK suppliers prefer Turkish buyers as they are ready to pay the price they ask for,” an India-based trader said.
Also, domestic demand was diverting the attention of the sellers.
“Most of the shredded scrap we have moved has been domestic as the prices have been better,” a US seller said.
Meanwhile, the imported scrap from established origins has continued facing competition from China-origin material in India, as the country has closed induction furnaces, leaving stocks of surplus material.
“The first batches of busheling trial lots in containers from China have started to arrive and the quality of the material seems to be fine,” a India-based trader said.
“Our clients have bought some tonnage of shredded scrap from China at $275 cfr Chennai, which would be equal to $280 per tonne cfr Nhava Sheva,” another Indian-based trader said.
“The quality is said to be good, people are happy about it,” the source added.
Turkish domestic scrap prices remained mostly stable at the beginning of the week as most steel producers in the country continued to buy scrap at a steady rate.
Juan Weik in Singapore, Nadia Popova in Moscow and Mei Ling Toh in New York contributed to this report.