WEEKLY SCRAP WRAP: Prices recovering globally except in US
Ferrous scrap prices in the major global markets remained firm during the working week from Monday April 30 to Friday May 4, with single exception of the United States.
Although Turkish steel producers halted their deep-sea scrap purchases at the end of last week, suppliers have kept their offers strong this week.
But the decreases in Turkish import prices seen in previous weeks have only now been reflected in the US export markets.
In the meantime, Indian scrap prices were rising, while conditions in the Taiwanese scrap market have been mostly stable over the past week.
The Turkish deep-sea scrap markets have been quiet this week, while steel mills in the country and their scrap suppliers continued to negotiate prices for cargoes to be delivered in May.
The mills were said to be waiting for next week’s conference of the International Rebar Producers & Exporters Association (Irepas) for market clarity to emerge and to resume their bookings in the deep-sea scrap market for May delivery.
After booking around 20 cargoes, Turkish steel producers went silent at the end of last week, following an uptick in prices.
The most recent transactions into Turkey were done around $352-355 per tonne cfr for HMS 1&2 (80:20) from the Baltic Sea region, after which the suppliers in the area raised their offers to $365 per tonne cfr, according to the sources.
But Turkish steel producers continued to bid no more than $355 per tonne for material, Metal Bulletin was told.
“Baltic Sea suppliers are still offering HMS 1&2 (80:20) at $365 per tonne cfr, but the Turkish mills are not ready to pay such high prices. However, the market seems to be strengthening,” a Turkish source said.
“I think the mills are waiting for the Irepas conference to see the market’s direction and we will probably hear more deals for May then,” another Turkish source added.
The Irepas conference will be held in Warsaw, Poland, on May 6-8.
Ferrous scrap export prices from the US dipped in four cargo sales to Turkey, prompting exporters on the country’s East Coast to consider further price reductions, while containerized scrap prices on the East and West Coasts held firm due to Asian demand.
Four cargoes – three from the US East Coast and one from the Gulf Coast – were traded to Turkey in the past week. The first two East Coast cargoes to Turkey traded at $357.50 per tonne cfr and $358 per tonne cfr for shredded scrap on April 26.
The following day, a cargo was sold off the East Coast to Turkey at $359 per tonne cfr for shredded scrap. A fourth cargo originating from the Gulf Coast changed hands on the same day at $357 per tonne cfr for the same grade.
Prices have fallen by $1-3 per tonne from a sale on April 18, which concluded at $360 per tonne cfr for shredded scrap. Some sources said that Turkish mills might try to push scrap prices lower, depending on their rebar export prices, but others see further falls in deep-sea prices as unlikely.
An export source believed that bulk prices to Turkey will remain in the range of $350-360 per tonne cfr for HMS 1&2 (80:20). “I don’t think they can push prices down further; otherwise, where are they going to get the scrap from? Sooner or later, they will have to come back and make a dent in the [US] market,” this source said.
US East Coast exporters are grasping the opportunity to further reduce their buying prices at the docks, emboldened by an expected drop in domestic US scrap prices in May and improved flows at dealer yards due to warmer weather.
“Export is basically making the market this month. The docks have already made the decision by taking buy prices down, and people are still shipping... [The export yards] are still getting material so, of course, the domestics are going to follow suit,” a seller in the domestic and export sector said.
Prices for containerized shredded scrap on the US East Coast showed modest gains this week due to rebounding demand from the Indian subcontinent. Prices inched upward to $345-350 per tonne fas from $340-350 per tonne fas a week ago.
On the US West Coast, containerized HMS 1&2 (80:20) prices remained at $320-325 per tonne fas this week, unchanged from last week. Container sales to Asia were held up by the Labor Day holiday on May 1 but delivered prices to major Asian destinations are expected to inch upward next week.
“Chinese steel futures are doing well, so that’s a good sign of support for scrap prices,” a West Coast export source said. “But I don’t think there is too much more upside to prices.”
Import prices for containerized HMS-grade scrap in Taiwan remained stable this week due to unchanged market fundamentals.
Metal Bulletin’s price assessment for US-origin HMS 1&2 (80:20) sold into Taiwan remained at $340-343 per tonne cfr on May 4.
US-origin scrap was on offer at $343-348 per tonne cfr Taiwan this week, up by $3-5 per tonne from the preceding week.
Traders said there had been limited offers of US-origin scrap because sellers were still holding out for higher prices, expecting the upward trend to continue.
“Sellers in the US think that prices will increase [when] Japan returns to the spot market next week after its Golden Week holiday,” a Taiwanese trader said.
There were still some HMS 1&2 (50:50) bulk cargoes from Japan and Hong Kong being offered, as well as Japan-origin HMS 2 bulk cargoes, at about $345 per tonne cfr Taiwan.
Bids were coming in at $338-340 per tonne cfr Taiwan, up from $335 per tonne cfr Taiwan last week, sources said.
One major buyer purchased 2,000-3,000 tonnes of imported scrap at close to $340 per tonne cfr Taiwan.
Prices for containerized shredded scrap imports into India went up this week on better levels of demand, market sources told Metal Bulletin on Friday May 4.
This week’s price rise for containerized imports comes as buyers continue to return to the market after a recent lull in activity resulted in stagnant prices.
Deals were heard at prices as high as $400 per tonne cfr Nhava Sheva for 1,200 tonnes from the UK, as well as one deal for 4,000 tonnes done at $390 per tonne and another at $393 per tonne cfr Nhava Sheva.
UK-origin scrap was in favor this week, with the majority of deals done for such material. One seller said that this was because delivery times are much shorter than for material from the United States.
A deal for Europe-origin material was heard at $390 per tonne cfr Nhava Sheva for 3,000 tonnes.
Shredded scrap was offered at prices as low as $385 per tonne cfr Nhava Sheva.
“Buyers are happy to pay $390 per tonne. Germany is asking for more than $400 per tonne [but its] prices are too high so we have not bought [from there],” a trader said.
Meanwhile, prices for HMS 1&2 imports into India edged up again this week, with demand continuing to increase with buyers coming back to the market after holding back for several weeks, keeping prices flat throughout April.
Europe-origin HMS 1&2 was heard sold at $375 per tonne.
Deals for Middle-East origin HMS 1&2 material were heard done at $377 per tonne and $379 per tonne early in the week, with offer prices for similar material edging up toward the end of the week to $383 per tonne.
Turkish domestic auto bundle scrap prices have gone up in line with imported scrap prices while ship scrap prices have remained stable at the beginning of the week.
Metal Bulletin’s weekly price assessment for domestic auto bundle scrap (DKP grade) in Turkey was TRY1,370-1,500 ($326-357) per tonne delivered, narrowing upward from the previous week’s TRY1,270-1,500 per tonne.
This upward movement in the weekly assessment came after major scrapyard Kiliçlar Hurda raised its buy price for the material by TRY100 to TRY1,370 per tonne delivered.
Paul Lim in Singapore, Carrie Bone in London and Mei Ling Toh in New York contributed to this report.