WEEKLY SCRAP WRAP: Turkish bookings drag global prices up
Global scrap prices have increased over the past week, as the mills in Turkey returned to the deep-sea scrap markets for December bookings.
Turkey has booked ten deep-sea cargoes since Tuesday November 14, totaling more than 300,000 tonnes.
Meanwhile, import scrap prices in India and Taiwan have also increased with steady demand for the material.
Steel mills in Turkey were expected to book deep-sea cargoes for December, but have been quiet for a while. However, they returned to the market on Tuesday because of increasing domestic rebar sales, sources told Metal Bulletin.
“It seems that domestic [rebar] sales have picked up and mills need to cover their December-shipment scrap requirements,” a trading source said.
A steel producer in Northern Turkey booked a US cargo, comprising 15,000 tonnes of HMS 1&2 (90:10), 18,000 tonnes of shredded and 2,000 tonnes of plate and structural (P&S) at an average price of $312 per tonne cfr on Tuesday.
After that cargo was booked, three more deals from various sources were heard on Wednesday.
A steel mill in the Iskenderun region booked a Canadian cargo, comprising 30,000 tonnes of shredded, 15,000 tonnes of HMS 1&2 (90:10) and 5,000 tonnes of P&S scrap at an average price of $320 per tonne cfr.
Another steel mill in the same region booked a European cargo, comprising 20,000 tonnes of HMS 1&2 (75:25) and 20,000 tonnes of bonus at an average price of $309 per tonne cfr.
And a steel mill in the Marmara region booked a Baltic Sea cargo, comprising 17,000 tonnes of HMS 1&2 (80:20) at $312 per tonne and 13,000 tonnes of bonus at $322 per tonne cfr.
Three cargoes were sold on November 16.
A steel mill in the Iskenderun region booked a US cargo, comprising 11,000 tonnes of HMS 1&2 (80:20) at $314 per tonne, 12,000 tonnes of shredded at $319 per tonne and 2,000 tonnes of bonus at $324 per tonne cfr.
A steel mill in the Marmara region booked a Baltic Sea cargo, comprising 10,000 tonnes of HMS 1&2 (80:20) at $314 per tonne, 13,000 tonnes of shredded at $319 per tonne and 2,000 tonnes of bonus at $324 per tonne cfr.
The same mill also booked a US cargo at similar prices for HMS 1&2 (80:20), shredded and bonus. However, the cargo breakdown was not clear.
Moreover, on Friday, another wave of buying was heard.
A steel producer in the Iskenderun region booked a Canadian cargo, comprising 35,000 tonnes of shredded, 10,000 tonnes of HMS 1&2 (90:10) and 5,000 tonnes of P&S at an average price of $320 per tonne cfr.
Another steel mill in the same region booked a US cargo, comprising HMS 1&2 (90:10) at $317 per tonne and shredded at $319 per tonne cfr. The cargo breakdown was not clear at the time of publication.
A third deal was heard after the indices were published, which was sold to a steel mill in the Marmara region from a US supplier. The cargo comprised HMS 1&2 (80:20) at $313 per tonne, shredded at $318 and P&S at $323 per tonne cfr but, once again, the breakdown was not clear.
The ferrous scrap export arena in the United States has regained stability after a brief stumble, with prices rebounding on the sale of a fresh cargo from the US East Coast to Turkey early this week.
The prices made a quick reversal on November 14 with the East Coast cargo containing 18,000 tonnes of HMS 1&2 (90:10), 15,000 tonnes of shredded, and 2,000 tonnes of plate and structural scrap (P&S) sold to Turkey at an average price of $312 per tonne cfr.
And export prices to Turkey have continued to rise, with sales from Europe, Canada and the Baltic Sea region sustaining the upward momentum in the deep-sea market.
“I do not see any downside for [bulk export] prices at the moment,” a broker source said. “Some of the US exporters are not very keen to sell a lot right now, because they are behind on orders that they have already committed to.”
An export source also shared the view that scrap is not plentiful on the US East Coast.
“Demand is there in the export market, and there isn’t an abundance of scrap on the docks anywhere,” he said. “But I don’t see prices going higher than $320 [per tonne] right now, because there really isn’t any reason to go higher than that.”
Meanwhile, demand is strong, and Indian and Bangladeshi buyers are still active in the East Coast containerized shredded scrap market because they need more material.
On the US West Coast, the upward momentum in prices for containerized HMS 1&2 (80:20) is set to continue this week. Sales to Taiwan concluded late last week at $295-300 per tonne cfr, but a trader source said that prices gravitated toward the upper end of that range early this week.
Taiwan’s import prices for containerized HMS-grade ferrous scrap remained on a bullish trend this week as demand remained stable.
Most discussions between buyers and sellers for USA-origin HMS 1&2 (80:20) were in the range $300-305 per tonne cfr Taiwan, while offers came in at $305-310 per tonne cfr Taiwan.
A key buyer purchased about 7,000 tonnes of imported scrap at $300 per tonne cfr Taiwan. Other market sources said that there were also deals at $300-305 per tonne for imported scrap.
Bids had edged up to $300 per tonne cfr Taiwan, with buyers willing to bid more than $300 per tonne cfr Taiwan for cargoes they deemed of a reliable quality. A major Taiwanese mill also increased its purchasing price for domestic scrap.
Traders described supply as tighter and said there were fewer offers in the market this week for US-origin cargoes.
In addition, bullish scrap prices in Turkey - which are used by Asian market participants as a key indicator of price movements - are supporting the higher prices in the Asian markets.
“There are expectations that import prices may remain firm for a while, [with] some bullish sentiment in the Asia steel market due to China starting its winter production cuts,” a Taiwanese trader said.
Indian steel mills returned to the market to purchase low volumes of shredded scrap this week, with prices showing a small increase, market sources told Metal Bulletin on November 17.
Metal Bulletin’s index price for imported shredded scrap in India rose to $330.24 per tonne cfr Nhava Sheva on Friday, up by $1.17 per tonne compared with $329.07 per tonne cfr last week.
Around 5,000 tonnes of US-origin shredded was heard bought at $325 per tonne cfr Nhava Sheva while 2,200 tonnes of UK-origin material was booked at $329-331 per tonne cfr Nhava Sheva. Other deals for several thousand tonnes of shredded were heard at $329-330 per tonne cfr.
Stocks of ferrous scrap are low at some Indian steel mills, which has led market participants to predict that producers will have to buy larger quantities before prices are pushed up at the end of the year.
“Right now only special steelmakers are buying shredded, but I’ve heard that mild steelmakers are going to come in to buy next week,” the seller said.
Market sources said that tighter scrap supply from Europe and the UK will affect the Indian import market.
“UK yards won’t sell in December because they expect prices to go up in January,” a seller said.
Ultimately, another trader said, Indian import scrap prices for the rest of 2017 will depend on the direction of prices in local Indian markets.
Turkish domestic scrap prices remained largely stable at the beginning of the week, except for steel mills raising their buy prices to secure more scrap.
The slight upward movement came after two steel mills raised their buy prices.
Alloy steel producer Asil Çelik increased its buy price for auto bundle scrap by TRY20 to TRY1,210 per tonne delivered, while long steel producer Ege Çelik increased its price by TRY15 per tonne to TRY1,235 per tonne.
Meanwhile, ship scrap prices in Turkey also remained stable, because all of the steel mills in the Izmir region were buying material at $305 per tonne delivered.
Lee Allen in London, Mei Ling Toh in New York and Paul Lim in Singapore contributed to this report.