Over the current week, the number of deep sea scrap sellers offering cargoes to Turkey has increased, depressing sentiment regarding prices in the market. While Turkish mills have been acting cautiously towards the higher price levels, most players in the market expected deep sea scrap prices to maintain their levels, with a slight upward potential. However, on October 10, Turkish producers report that European scrap sellers in particular have become fully present in the market seeking opportunities to sell cargoes.
Market sources think that European scrap sellers are willing to accept lower price levels in the coming period. “The number of available offers from the region is inevitably exerting pressure on prices. We can hear lower levels in the coming deals, presumably around $375/mt CFR,” a seller of European and ex-US scrap said. Another seller commented, “China is also moving down. Players are not convinced about China. With the higher number of offers, Turkish mills are unlikely to accept higher than $380/mt CFR in the coming round of bookings.” A third scrap seller stated that he believed it is early to make a prediction, adding, “This softening is caused by the sellers. If they take a step back, the picture may change.” A source at a major Turkish mill commented, “If Turkish mills take a breather before new deals, we can see lower than $375/mt CFR for ex-EU scrap.” A second source from another major mill agreed, stating, “Procurements for the first half of November have been completed. Despite the high number of bookings, deep sea scrap prices have moved up only slightly and now there are lots of offers in the market. China is also negative.” Under the current conditions, Turkey’s deep sea scrap market is once again under downward pressure, with the pricing strategy of sellers being monitored amid negative sentiments.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved up by 0.79 percent week on week. The prices are now 4.08 percent higher month on month in the deep sea segment, with prices being in the range of $378-388/mt CFR.
In a flurry of late activity, US domestic scrap pricing rose for the new month, with most grades noted at least $20/gt higher than September settled prices, amid strong export demand on the US East Coast following a fairly quick settlement to the three-day port workers strike, and amid improved domestic mill buying activity in the Southeast and Midwest regions as more idled facilities were expected to emerge from maintenance outages this month, bolstering mill demand for scrap, market insiders told SteelOrbis this week.
US domestic scrap prices in the Northeast for October settled higher versus September, while prices in the Ohio Valley settled $20/gt ($20/mt) higher.
SteelOrbis has learned that the current price for Mexican domestic shredded scrap has remained stable over the past week at MXN 6,500/mt ($326/mt). Additionally, HMS I/II scrap prices have remained unchanged over the same period at MXN 5,350/mt ($268/mt).
Once more, this week the local scrap market in Italy did not see much change in terms of prices and demand. However, increases in Turkey and the situation in China are starting to exert an influence on the Italian market, manifested in the more moderate reductions in scrap purchase prices requested by steel producers for October. “Before they asked for €20-30/mt, now they ask for €5-10/mt," one source commented, adding, "Prices will probably remain stable, but we need to see what will happen now that prices in China have started to fall again."
While for some market players it is too early to talk about a possible rebound, others think that it could occur before the All Saints' Day holiday (1-3 November) given the trend of scrap prices internationally. Producers disagree. According to them, the upward trend seen in Turkey cannot materialize in Italy because it is not supported by finished steel consumption. According to another source, producers "are in no hurry to buy" and most likely many steel mills will extend the holiday period to further slow down production.
In Spain, the reduction of €15/mt requested last week by an important steel mill was not accepted by suppliers, due to the increases that are occurring in the international market. As a result, prices bounced back to mid-September levels.
Japan’s Kanto scrap export tender was closed with a price increase on October 9. This is the first price improvement recorded in the tender since June this year. In the Kanto export tender, the highest bid was at JPY 45,680/mt FAS, JPY 2,960/mt higher than last month. The dollar-based prices have increased from $302/mt to $307/mt FAS, including the changes in the Japanese yen-US dollar exchange rate.
The leading Japanese EAF-based steel producer Tokyo Steel has announced an increase in its domestic scrap purchase prices, the first one since early June. The announcement came after the price increase observed in the Kanto scrap export tender in Japan. However, the dollar-based prices of Tokyo Steel did not follow the same trend as the yen-based prices due to the strong depreciation of the Japanese yen. Tokyo Steel’s general range for H2 grade scrap has moved up by JPY 1,000-1,500/mt to 40,000-41,500/mt ($269-279/mt) depending on the mill.
South Korean steelmaker POSCO has continued to share its bids for Japanese scrap, this time increasing its bid prices. POSCO has shared its bids for Japanese HS grade scrap at JPY 48,000 46,500/mt ($323/mt) CFR. This time, POSCO has shared bids for Japanese shredded scrap at JPY 47,000/mt ($316/mt) CFR.
Import scrap offers shared with Taiwanese buyers this week have moved up sharply. The sentiment in Taiwan has been positive since last week due to recovering international scrap market. While offers for ex-US HMS I/II (80:20) scrap in containers have increased by $11-15/mt over the past week to $323-340/mt CFR, some Taiwanese producers have concluded bookings for this grade at $320/mt CFR this week. Offers for Japanese H1/2 (50:50) scrap bulk have been heard in the market at $333/mt CFR.
Vietnam’s import scrap market has remained relatively quiet this week despite increasing import scrap offers, especially from the US. Prices for Japanese H2 scrap to Vietnam this week have moved up by $5/mt on the upper end to $335/mt CFR this week. Ex-US bulk HMS I/II 80:20 scrap offer prices have moved up over the past week by $10-15/mt to $370/mt CFR Vietnam.