WEEKLY SCRAP WRAP: Stronger Turkish market lifts global prices
Higher Turkish ferrous scrap import prices boosted prices in the United States, Taiwan and India this week, generating a sense of bullishness among global sellers who feel that there is more upside to Turkish prices.
Imported scrap prices in Turkey rose on improved demand and tighter availability of deep-sea cargoes, causing US scrap export prices and Taiwanese and Indian scrap import prices to mirror this uptrend.
Turkish steelmakers booked six cargoes during the week ended Friday November 3. Trades from the US were made at $309-$310 per tonne cfr for HMS 1&2 (80:20), while deals on European and Baltic Sea cargoes closed at $307-$310 per tonne cfr for the same grade.
“The primary driver of the market is the supply side – the market is quite oversold,” one European source said on October 31. “Demand is intact and the order books [at mills] are good.”
The next deal prices for US-origin cargoes will reach $315 per tonne cfr Turkey for HMS 1&2 (80:20), the source predicted.
A steel producer in the Marmara region booked a US cargo, comprising 18,000 tonnes of HMS 1&2 (80:20) for $309 per tonne cfr, 25,000 tonnes of shredded for $314 per tonne cfr and 2,000 tonnes of plate and structural (P&S) for $319 per tonne cfr on October 30.
Two days later, three more deals out of the Baltic Sea region were confirmed.
The first cargo contained 25,000 tonnes of HMS 1&2 (80:20) at $308 per tonne, with 5,000 tonnes of bonus grade at $318 per tonne. The second cargo consisted of 20,000 tonnes of HMS 1&2 (80:20) at $310 per tonne, with 5,000 tonnes of bonus grade at $320 per tonne and 5,000 tonnes of shredded at $315 per tonne.
A third cargo was also reported sold, containing 20,000 tonnes of HMS 1&2 (80:20) at $309 per tonne, 5,000 tonnes of bonus grade at $319 per tonne and 5,000 tonnes of shredded at $314 per tonne.
On November 2, two more cargoes were traded.
One Baltic Sea cargo contained 30,000 tonnes of scrap, comprising 25,000 tonnes of HMS 1&2 (80:20) at $307 per tonne cfr and 5,000 tonnes of bonus at $317 per tonne cfr.
Another cargo was booked from the US that contained a total of 40,000 tonnes of scrap: 25,000 tonnes of shredded at $315 per tonne cfr, 10,000 tonnes of HMS 1&2 (80:20) at $310 per tonne and 5,000 tonnes of bonus at $320 per tonne.
“We’re expecting more deals from the US in the next couple of days, which should give a clearer indication of demand and price direction,” a second European source said on November 2.
US ferrous scrap export prices to Turkey have risen in the past week, alleviating downward pressure on the US East Coast market for containerized shredded scrap. At the same time, improving demand from Asia has raised containerized HMS-grade prices on the US West Coast.
US exporters have sold 13 cargoes to Turkey since the beginning of October, which means at least 500,000 tonnes of ferrous scrap will head offshore over the next two months.
Meanwhile, market participants indicated that East Coast containerized shredded scrap prices had inched up on the low end of the range to $295-300 per tonne fas from $293-300 per tonne fas a week ago.
“Demand [for containerized shredded] seems to be stable. I was surprised when prices backed off by $6-7 [per tonne] last week, but then quickly came back up to $300 [per tonne],” a US source said.
On the West Coast, containerized HMS 1&2 (80:20) was offered to Taiwan at $298-$300 per tonne delivered this week, according to a trader source.
Stable demand from Taiwan and Vietnam has containerized scrap suppliers on the US West Coast indicating that prices have reached $283-285 per tonne fas for HMS 1&2 (80:20) scrap this week.
“Prices are headed upward because Taiwanese buyers are short. They did not stockpile and they went down too low on prices previously, which curtailed supplies,” a second US source said.
Import prices for containerized HMS-grade scrap in Taiwan continue to improve due to supply tightness and stronger scrap prices out of Turkey and Japan.
Metal Bulletin’s assessment of import prices for US-origin HMS 1&2 (80:20) into Taiwan was $290-300 per tonne cfr for the week ended November 3. This was up by $10 per tonne from a week ago and marked a second week of increases.
Such cargoes were being offered at $298-302 per tonne cfr Taiwan, while negotiations took place at $290-300 per tonne cfr Taiwan.
A source at a key buyer said that it had purchased about 9,000 tonnes of imported scrap at $290-295 per tonne cfr Taiwan.
Other market sources said that there were bids made slightly above $290 per tonne cfr at the start of this week. By Friday, a few buyers had increased their bids to at least $295-297 per tonne cfr Taiwan.
“The market is bullish this week and could remain so for the near term. Traders think that it may break eventually, above the level of $300 per tonne cfr Taiwan,” a Taiwanese trading source said.
Prices for containerized ferrous scrap imported into India rose this week with buyers under pressure because of low stocks and tighter supply at yards in Europe.
Metal Bulletin’s index price for imported shredded scrap in India on Friday was $324.06 per tonne cfr Nhava Sheva, up by $10.94 per tonne week-on-week compared with $313.12 last week.
“India was quiet for a very long time, but now they are getting into a rush to buy material for December and January shipments,” one seller said.
“People know they won’t get any material in December from Europe and the United States because of holidays,” he added.
UK-origin shredded scrap was heard offered at $330-335 per tonne cfr Nhava Sheva, while offers from the US were heard at $315-330 per tonne cfr, with values at the bottom end of the range heard earlier in the week.
At the same time, Metal Bulletin’s weekly price assessment for containerized imports of HMS 1&2 (80:20) rose by $10 per tonne to $285-295 per tonne cfr Nhava Sheva on November 3, compared with $275-285 per tonne cfr one week ago.
Prices were aided by an improving market for domestic scrap, market sources said.
Local auto bundle scrap prices in Turkey climbed alongside higher imported scrap costs but this was not the case for domestic shipbreaking scrap, whose prices remained flat.
Metal Bulletin’s weekly price assessment for domestic auto bundle scrap in Turkey was TRY1,035-1,170 ($272-307) per tonne delivered on Monday, rising from TRY1,010-1,145 per tonne delivered.
A buyer source said that the market was slow even though several Turkish mills had increased their buying prices for domestic auto bundle scrap.
Metal Bulletin’s weekly price assessment for melting scrap from shipbreaking in the Turkish domestic market was $305 per tonne delivered on October 30, unchanged week-on-week.
Paul Lim in Singapore, Serife Durmus in Bursa, Declan Conway in Galway and Lee Allen in London contributed to this report.