Turkey’s deep sea scrap market has shown a significant fall this week, first due to an ex-Canada deal concluded by an Izmir-based producer, and then a further fall could not be prevented with ex-US scrap sellers willing to sign deals at lower prices. The ex-UK scrap deals done towards the end of the week signaled that the margin between ex-EU and ex-US scrap prices is once again narrower than usual. But this was expected by market players due to European suppliers’ collection costs and the euro-dollar exchange rate.
Late yesterday, August 22, another ex-US booking was confirmed, signed by an Iskenderun based producer for 16,000 mt of HMS I/II 80:20 scrap at $360/mt CFR, 12,000 mt of shredded scrap at $80/mt CFR and 2,000 mt of P&S grade scrap at $380/mt CFR. The cargo will be shipped in early October. This is the second ex-US deal done by the same seller and the response of other US-based sellers is yet to be seen.
SteelOrbis observes that Turkish mills are attracted somewhat to the current prices levels. $360/mt CFR from the US and also $355/mt CFR from the EU have been viewed as attractive by some mills. A stable trend in prices next week is the general expectation for now. While some sources at Turkish mills think that the recent price drop is not enough and that the coming quarter will be harder due to winter conditions and the uncertain economic outlook in Turkey, the sellers, in particular the EU-based sellers, are reluctant to say that prices can drop further. A sub-collector in Germany mentioned that their own purchase prices from peddlers are at around €270/mt delivered, adding, “Now we receive bids at around €285/mt DAP from export yards. There is no margin left for us if we accept this level.” On the other hand, expectations for September both in the US and the EU are negative in terms of scrap prices. The US domestic scrap market is now seeing a sideways to downward price movement, while European sources report they expect their own local market to move down by €15-25/mt in September.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved down by 3.31 percent week on week. The prices are now 7.56 percent lower month on month in the deep sea segment, with prices being in the range of $355-360/mt CFR.
US ferrous scrap prices for September are heard steady to lower this week, even as flat steel prices are reported at higher levels this week, as flat steel supply is expected to be reduced as a result of scheduled maintenance outages being brought forward at hot strip mills around the US, market insiders told SteelOrbis this week. Most planned maintenance outages usually occur later in the fourth quarter. However, this year, market insiders tell SteelOrbis that the increasing outlook for an improved steel market later this year following the US presidential elections and an expected September Federal Reserve rate cut has prompted many mills to bring forward their planned outages. An earlier exit from maintenance would allow mills to sell into a higher-priced market later in the year, they said.
Based on sideways to lower versus August US scrap settled prices, Midwest busheling scrap for September is assessed at or below $355-375/gt ($361-381/mt) delivered to mill. September shredded scrap is assessed at or below $370-380/gt ($376-386/mt), while September HMS#1 and P&S scrap are expected to settle at or below $320/gt ($325/mt) and $345-355/gt ($351-361/mt) delivered to mill, respectively.
SteelOrbis has learned that the current price for Mexican domestic shredded scrap has decreased by MXN 50/mt ($3/mt) over the past week to MXN 7,600/mt ($381/mt). Additionally, HMS I/II scrap prices have dropped by MXN 50/mt ($3/mt) over the same period to MXN 5,750/mt ($288/mt).
The local German scrap market has continued to soften over the month of August amid a lack of decent demand from the local and export markets. With Turkey showing little interest in deep sea scrap prices, pressure has built up on all European collection prices and this has contributed to the sluggish trade during Europe’s holiday season. According to the latest data provided by the Bundesvereinigung Deutscher Stahlrecycling-und Entsorgungsunternehmen e.V, in the first 20 days of August scrap prices moved down by €1.2-14.2/mt month on month. Additionally, the year-on-year increase is in the range of €24.5-58.8/mt.
Currently, scrap collection prices at EU-based export yards are in the range of €295-305/mt DAP Amsterdam and Belgium, moving up from the €300-305/mt DAP levels observed earlier this month. Market sources report that there are two buyers bidding at €285-290/mt DAP Amsterdam, but these levels do not attract large volumes.
The leading Japanese EAF-based steel producer Tokyo Steel has announced reductions in its scrap purchase prices today, August 21, cutting them by JPY 500-1,000/mt for all assets, effective from August 22. Tokyo Steel’s general range for H2 grade scrap has settled at JPY 45,500-46,500/mt ($312-319/mt) depending on the mill. The dollar-based equivalent has decreased by $14/mt.
Vietnam’s import scrap market remains weak, continuing to move down week on week. Market sources report that cheaper billet alternatives are still taking their toll on the market, while international scrap prices are also moving down sharply this week. SteelOrbis has learned that offers for Japanese H2 scrap to Vietnam are currently at around $360-365/mt CFR, declining by $5/mt week on week.
Currently, Tokyo Bay FAS-based prices for H2 grade scrap are at JPY 46,000/mt ($315/mt). This level shows that FOB prices are at JPY 47,000/mt ($322/mt) for this grade.
Following the decline recorded in the international scrap market, Taiwanese sources report that scrap offers from the US and Japan to Taiwan have also indicated sharp drops this week. “Activity in the Taiwanese rebar market has finally kicked off this week, but quantities are still limited. The declines in billet prices have also taken their toll on prices,” a source reported. While offers for ex-US HMS I/II (80:20) scrap in containers to Taiwan were at around $340/mt CFR earlier this week, the downtrend of price offers continued during the week and they are now at $325-335/mt CFR. Following the Obon holiday (August 13-16) in Japan, offers for Japanese H1/2 (50:50) scrap bulk scrap opened the week at $360/mt CFR, then declined further to $345-355/mt CFR.