WEEKLY SCRAP WRAP: Prices hold firm amid strong demand
Steel scrap prices in the world’s major markets remained firm during the working week from Monday February 12 to Friday February 16.
Turkish steel mills continued their deep-sea scrap purchases for March, with prices going up slightly over the week.
Meanwhile, the United States’ export market enjoyed the demand from Turkish mills and expected stronger prices in the country’s own domestic market.
Imported scrap prices in the Indian market moved up quite strongly due to good local demand and reduced scrap supplies from Europe and the US.
Turkish steel mills booked at least four deep-sea cargoes this week from various locations, on which prices escalated slightly in line with recovering demand throughout the week.
On February 14, a steel mill came to the market and booked a US cargo, comprising 30,000 tonnes of HMS 1&2 (80:20) at $349.25 per tonne, 5,000 tonnes of shredded at $354.25 per tonne and 5,000 tonnes of bonus at $359.25 per tonne cfr.
On Thursday, three steel mills in the country booked more deep-sea cargoes at higher prices.
A steel mill in the Izmir region booked a US cargo, comprising 30,000 tonnes of HMS 1&2 (80:20) at $353 per tonne, 12,000 tonnes of shredded at $358 per tonne and 3,000 tonnes of bonus at $363 per tonne cfr.
A second steel mill in the Izmir region booked a Baltic Sea cargo, comprising 9,000 tonnes of HMS 1&2 (80:20) at $353 per tonne, 9,000 tonnes of shredded at $358 per tonne and 5,500 tonnes of bonus at $363 per tonne cfr.
And a steel mill in the Iskenderun region booked another Baltic Sea cargo containing 12,000 tonnes of HMS 1&2 (95:5) at $359 per tonne cfr.
The mills in the country were expected to book more scrap for March but demand was expected to fade slightly.
“The mills in Turkey [have already] bought almost half of their March requirements and [are now in no] hurry to continue their bookings,” a Turkish source said.
Exporters in the US have sold 10 ferrous scrap cargoes to Turkey this month, which could bring some strength to the domestic market in March with at least 370,000 tonnes scheduled to move offshore over the next six weeks.
Bulk ferrous scrap prices recovered from last week’s slide, holding steady in the upper $340-per-tonne-cfr range for HMS 1&2 (80:20).
Some market participants have started to speculate that the strong export demand could provide some upward momentum for domestic scrap prices on the US East Coast next month.
“I think it is still too early to tell. With the operating rate being where it is, you could see some upside in March but I wouldn’t bank on it yet,” an East Coast dealer said. “The operating rates at the mills are fairly strong, so if they have to fight the exporters for scrap then you could certainly see a blip in prices.”
Meanwhile, containerized shredded scrap prices on the East Coast pushed higher due to strong overseas demand, particularly from India. Prices rose to $337-347 per tonne fas this week from $335-340 per tonne fas previously, and market participants expect prices to continue to inch upward next week.
On the US West Coast, the market for containerized HMS 1&2 (80:20) was quiet, with very few trades expected due to the start of the lunar new year celebrations on February 16. Prices were stable at $295-305 per tonne fas, unchanged from the previous week, according to market participants.
The Taiwan market was closed this week due to the lunar new year and there was no scrap trading. So imported scrap prices in the country remained stable over the week, according to market sources.
Market participants expected that many traders would not be back until the middle of next week, and they were awaiting price signals from China before looking for any change in Taiwan scrap prices, Metal Bulletin was told.
India’s import ferrous scrap markets have continued their strong start to the year with prices for containerized material rising amid continued good demand and reduced volumes being offered for sale, sources told Metal Bulletin.
The rise in Turkish import scrap prices served both to help sentiment in India, and to create caution among sellers when considering whether to do business at current prices.
“Most suppliers are holding material [back], anticipating further price increases after the Chinese [lunar new year] holiday. But Indian mills are quite okay in terms of stocks for the month of March,” according to one seller.
“I don’t see much scrap floating around and people are not falling over each other to sell,” one trader said.
Metal Bulletin’s weekly index for containerized imports of shredded scrap into India was $378.75 per tonne cfr Nhava Sheva on February 16, up by $10.23 per tonne from $368.52 per tonne cfr last week.
Shredded sales prices started the week at $370-375 per tonne cfr Nhava Sheva, before deals were heard at $379-382 per tonne cfr toward the weekend, including transactions for 1,200 and 2,000 tonnes of scrap.
But the higher prices have led to lower volumes of imported material being bought this week compared with last week, according to trading sources.
Market sources expected prices over the coming weeks either to remain stable or to inch upward again.
“I think things will stay this strong for the next one or two weeks. Today, the prices are competitive compared with [those in] Turkey,” a third seller said.
“The euro is stronger so I don’t see European sellers being able to decrease their prices. It would hurt their bottom line right now,” the first trader said.
Turkish domestic auto bundle scrap prices showed mixed dynamics at the beginning of the week, with some mills reducing their prices in line with falling imported scrap values, while other mills raised their prices to buy more material.
A number of steel mills in the country had reduced their buy prices for auto bundle material by TRY10-15 ($3-4) per tonne in the previous week, while others raised their prices by TRY10-70 per tonne.
Meanwhile, ship scrap prices were unchanged from last week. Metal Bulletin’s weekly price assessment for melting scrap from shipbreaking in the Turkish domestic market was $350-358 per tonne delivered on Monday, unchanged week-on-week.
Lee Allen in London, Mei Ling Toh in New York and Paul Lim in Singapore contributed to this report.