WEEKLY SCRAP WRAP: Turkish prices stop slide, other major markets inch down
Global scrap prices showed mixed fortunes in the week from Monday April 9 until Friday April 13, with Turkish prices showing volatility while further declines were recorded in other major scrap markets.
Although Turkish import scrap prices for Northern Europe-origin material were up by $0.59 per tonne week-on-week on Friday after mills returned to buying activity, small decreases were recorded in Indian import prices, Taiwanese import prices and containerized US export prices over the past seven days.
After starting the week quietly, Turkish steel producers returned to buying deep-sea cargoes and booked more than 120,000 tonnes of scrap over the past seven days.
A steel producer in the Izmir region booked a Baltic Sea cargo, comprising 25,000 tonnes of HMS 1&2 (80:20) at $352 per tonne and 5,000 tonnes of bonus at $362 per tonne cfr on Wednesday.
Three deep-sea cargo trades were heard on Thursday, although the deals had been made late on Wednesday, according to market sources.
A steel mill in the Marmara region booked a European cargo, comprising 19,000 tonnes of HMS 1&2 (75:25), 5,000 tonnes of shredded and 11,000 tonnes of bonus at an average price of $354.50 per tonne cfr.
The same mill also booked a Baltic Sea cargo, comprising 27,000 tonnes of HMS 1&2 (80:20) at $354 per tonne and 8,000 tonnes of bonus at $365 per tonne cfr.
Meanwhile, a second steel mill in the same region booked a UK cargo, comprising 36,000 tonnes of HMS 1&2 (80:20) at $354 per tonne cfr. The cargo was scheduled to be shipped by May 20 at the latest.
“I think [the market] was [at] the lowest level scrap prices could reach, and there will be more bookings from now on,” a Turkish source said. “Scrap prices will rebound from these values.”
“The Turkish mills have just started May bookings,” a Turkish source said on Friday. “They still need more scrap and I believe we will hear of more bookings today or Monday.”
The United States’ ferrous scrap export market has been caving under downward pressure, with containerized scrap prices slipping on both the East and West Coasts and lower-priced international deals with Turkey prompting exporters in the former region to pre-emptively lower their buying prices.
No bulk cargoes have been confirmed sold from either of the US coasts for two-and-a-half weeks, with Turkish mills preferring more affordable cargoes from Europe and the Baltic Sea.
The persistently lower price levels to Turkey gave US East Coast exporters the impetus to reduce dock-buying prices, even though they have not made any cargo deals to Turkey in weeks. The average dock prices for HMS 1 scrap in Boston and New York were down by $10-15 per gross ton to $305 and $300 per ton respectively.
“I think they are just hedging. The exporters are concerned that Turkey will come back to the US market at lower numbers, so they don’t want to get stuck with high-priced inventory in the long run,” an East Coast processor source said.
An export source echoed this view, noting that exporters are reducing their buying prices to maintain their margins. There is still money to be made even if US exporters accept prices in the mid-$350-per-tonne range in their next sales, because the spread between dock-buying and export pricing would be in the range of $40-45 per tonne, he added.
“I get the sense that a $20 [cumulative reduction] may be [an end point],” a seller to the domestic and export sector said. “[The exporters] are taking prices down by $20 [per ton] based on European sales to Turkey and not sales to Bangladesh or Egypt – they are just dropping their prices and seeing what happens.”
US exporters on the East Coast were comfortable about lowering their buying prices now that the price of obsolete scrap grades has settled at a modest increase of $10-15 per ton for April in the coastal region. The onset of better spring weather is also drawing more scrap into the supply chain, resulting in improved flows.
Prices for containerized shredded scrap imports into India moved downward again this week despite trading conditions improving by the end of the period, market sources told Metal Bulletin.
Shredded scrap was said to be available at $380-385 per tonne cfr Nhava Sheva on Friday, with deals heard at the end of the week at $382 per tonne cfr for 12,000-13,000 tonnes of material and at $380-385 per tonne cfr for 500 tonnes of UK-origin material.
Deals for shredded concluded earlier in the week were heard at $370-375 per tonne cfr Nhava Sheva.
“At this point, I don’t see any trigger to increase the price of scrap and steel products. My personal feeling is that the upside is a little capped at the moment,” one buyer said.
Although there was a good amount of market activity this week, one trader told Metal Bulletin that prices needed to drop further to bring more buyers into the market.
“Markets are shrinking. There is a thought that if shredded prices reach $370 per tonne cfr, there will be lots of booking,” he said.
And some market traders were taking positions in the market in the belief that prices were about to rise.
“I feel like this is a buying time,” one trader said, with another trader saying that “people are waiting for the market to pick up.”
Import prices for containerized HMS-grade scrap in Taiwan resumed their decline this week, with soft demand continuing to weigh on prices.
US scrap was offered at $335-340 per tonne cfr Taiwan this week. There were no offers heard last week, with Taiwan on holiday for the Qingming Festival, or tomb-sweeping day, on April 5 and 6.
Deals involving small shipments were concluded at $330-335 per tonne cfr Taiwan, sources said, with buyers submitting bids at $330 per tonne cfr Taiwan.
“Demand has been thinner because buyers are not willing to purchase large shipments in the spot market,” a Taiwanese trader said on Friday.
An unclear market outlook is also making market participants hold back.
“There is no sign that the market has improved. Sellers have also only sold small quantities this week, in case there is an improvement in the spot market soon. While this may happen, because steel futures in China have recovered, there is still no concrete sign that it will,” an end-user source said.
Turkish domestic ship scrap prices fell slightly with the Turkish lira weakening against the US dollar, while auto bundle scrap prices remained flat, sources said.
The downward movement in the weekly ship scrap assessment came after long steel mill Habas reduced its buy price for the material to $350 per tonne delivered, while fellow long steel mill Ege Çelik reduced its buy price to $341 per tonne.
Cem Turken in Mugla, Carrie Bone in London, Mei Ling Toh in New York and Paul Lim in Singapore contributed to this report.