Having indicated a significant drop on November 20, Turkey’s deep sea scrap market continued its sharp downtrend in a subsequent ex-Baltic booking. Earlier in the week, negative sentiment had been gaining ground in Turkey. While some market sources thought that deep sea scrap prices had settled at around $345-350/mt CFR after the above deals, others voiced their expectations for a further price decline. One scrap seller said prices will settle at below $340/mt CFR, while another scrap supplier stated that $340/mt CFR may be the bottom level. The first opinion has been gaining traction in the market towards the end of the week.
An European scrap exporter’s bids for scrap collection are at around €280/mt DAP, market sources report, while no lower level has been heard yet at EU-based export yards. Most market sources have negative expectations for the rest of the year and for the first quarter of the coming year. Uncertainties have increased in the international steel and scrap markets after the US presidential elections and due to the industrial slowdown in the EU. The situation in alternative scrap markets is also negative. India, Bangladesh, and Pakistan have been recording price decreases and slow scrap demand over the past week. Turkish mills report that they are also receiving billets and slabs from their previous contracts and are in no rush to slow down the declines observed in scrap prices. Demand in the local rebar market is also declining, with winter weather conditions starting to be felt in southern Turkey.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved down by 1.93 percent week on week. The prices are now 4.83 percent lower month on month in the deep sea segment, with prices being in the range of $350-361/mt CFR.
The US scrap market for the month of December is now being called sideways as compared to November, following recent late scrap settled prices, with some US steel scrap grades finishing mixed to higher for the month, as market insiders told SteelOrbis this week. Insiders said the fast approaching winter season in the US Northeast and upper Midwest could keep scrap prices in the US Ohio Valley stable compared to the recent November settled prices, even as demand for finished steel from the US auto and manufacturing sectors remains unremarkable thus far in the fourth quarter. Insiders said the possibility for snowfall and colder weather in the near term could further limit the already scant new yard inflows, despite limited reports of higher collection prices being paid as a way to increase lagging inventories.
SteelOrbis has learned that the current price for Mexican domestic shredded scrap has remained stable over the past week at MXN 6,700/mt ($319/mt). Additionally, HMS I/II scrap prices have remained unchanged at MXN 5,150/mt ($245/mt) over the same period.
At the beginning of November, the local German scrap market indicated a downward movement, which was anticipated to continue until the end of the month. During the second week, in fact, general scrap prices were down €3-7/mt depending on the grade. In the past week, the third week of November, prices seem to have stabilized, partly since many players in the market have halted their activities, having met their needs until mid-December, when they are planning up to three-week closures for the Christmas holidays, during which they will carry out maintenance works.
Some major scrap collectors are still struggling to conclude sales in the local German market, so they are focusing instead on sales to European export yards, which are buying scrap at €280-290/mt DAP.
In addition, the general situation in the local finished steel market is affecting scrap flows, which are slow amid limited demand from industries like automotive and construction. According to some reports, auto companies like Volkswagen and Ford are cutting their workforce.
Yesterday, November 21, BDSV (Bundesvereinigung Deutscher Stahlrecycling-und Entsorgungsunternehmen e.V) published its usual average ex-yard prices from Germany to all destinations for the first 20 days of the month, with the E1 scrap price at €262.9/mt, down €5.0/mt month on month.
Over the past week, local scrap prices have remained unchanged in Italy and trading activity has been rather slow. According to a trade source, scrap availability continues to be very scarce, but demand is also at a low level and it seems that most steel mills have withdrawn from the market, while those who were looking for material have preferred to hold back in order to avoid further price increases. Steel producers, in fact, believe that scrap prices cannot rise given the continued weakness observed in sales of finished products. In addition, there are rumours in the market that several producers want to lower their scrap purchase prices starting next week.
The local Italian scrap market is, therefore, not expected to move up in the coming weeks, also in view of the widespread downward trend in the international markets.
Over the past week, South Korean steel producer POSCO has cut its bids for Japanese scrap by JPY 1,000/mt or $4/mt. South Korean market sources report that Hyundai Steel has shut down its second facility in Pohang, in the southern region of the country, which follows POSCO’s decision to shut down its wire rod production line No. 1 as of November 19 after 45 years of operations. POSCO also shared bids for Japanese shredded scrap, decreasing them by JPY 1,000/mt to JPY 48,000/mt ($310/mt) CFR, down $4/mt on US dollar basis, as compared to the previous levels announced last week. Considering the gap between ex-Japan shredded and H2 scrap prices at around JPY 3,000-4,000/mt, this means indications for ex-Japan H2 prices for South Korea are at JPY 41,000-42,000/mt FOB or $265-272/mt FOB.
Taiwan’s import scrap market has continued to move downwards over the past week. The sharp drop in the international scrap market is contributing to the soft price trend, while China is still exerting downward pressure in the region. This week, offers for ex-US HMS I/II (80:20) scrap in containers have continued their downtrend and declined by $8/mt on the lower end to $310-325/mt CFR. During the past week, offers for Japanese H1/2 (50:50) scrap bulk have moved down from last week’s $328-333/mt CFR range to $320-328/mt CFR.
Over the past week, import scrap prices in Vietnam have remained relatively stable, with little change observed in Vietnamese mills’ appetite for scrap. Alternative products are still exerting pressure on import scrap prices, in particular on prices for ex-US bulk cargoes. Offers for Japanese H2 scrap to Vietnam have remained stable over the past week at $335-340/mt CFR. Following the bookings closed last week for ex-Japan H2 grade scrap at $335/mt CFR, bids from Vietnam have declined to $330/mt CFR. Ex-US bulk HMS I/II 80:20 scrap offer prices are currently at $360-365/mt CFR, moving down by $5/mt on the lower end.