With the new deals which surfaced on October 31, Turkey’s import scrap market is now considered to have hit the bottom.
Most market source believe that the downward trend of deep sea scrap prices has come to an end with the deals in question, with some deals confirming the previous prices. Some European scrap market players report that scrap flow in Europe is weak and, despite the lack of demand in the EU, prices remain stable in the local market. As SteelOrbis reported , Turkish buyers have been insisting on lower billet prices, seeing the decline in the scrap segment. There has been a lack of attractive billet offers lately, so only small-volume deals have been done in Turkey’s import billet market. While there have been price increases announced by an Iskenderun-based rebar producer, market sources believe that they are getting ready for the rumored termination of the tax exemption for the region by the end of 2024. Southeastern Turkish producers were given several tax exemptions after the massive earthquakes which hit the region on February 6, 2023.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved down by 0.55 percent week on week. The prices are now 4.39 percent lower month on month in the deep sea segment, with prices being in the range of $355-363/mt CFR.
US domestic scrap pricing for the month of November is now seen trending sideways to down, as many mills are reported to have issued cancellation orders on October 30 for as of yet undelivered October scrap, indicating potentially limited demand for November scrap during next month’s buy-cycle, market insiders have told SteelOrbis this week. “Recent global steel market pricing is not sticking,” a Midwest scrap insider told SteelOrbis, adding, “As a result, the next thing the US mills are going to do is take it out of the price of November scrap.” Insiders said next week’s US presidential election is also increasing uncertainty in the markets and so far it remains unclear how either political party’s policies will affect the US steel markets.
Based on a sideways to lower November scrap call, Ohio Valley busheling scrap on a delivered to customer basis for November is forecast to be at or below the October levels which settled at $375-395/gt ($381-401/mt), while shredded grades are seen at $370-380/gt or $376-386/mt. HMS 1 is likely to settle at or below the October settled level of $340/gt or $345/mt, while P&S is expected to settle at $365-375/gt or $376-386/mt at the close of the November buy cycle.
SteelOrbis has learned that the current price for Mexican domestic shredded scrap has risen by MXN 100/mt ($5/mt) over the past week to MXN 6,600/mt ($325/mt). Additionally, HMS I/II scrap prices have remained unchanged over the same period at MXN 5,350/mt ($263/mt).
The general range of local scrap prices in Italy has remained essentially unchanged this week, but the market remains tense as some mills are conceding €10-15/mt increases to traders, especially for turnings and busheling. However, according to sources, these increases can be attributed to an alignment of prices to real market values by producers who started from very low quotations, as well as being attributed to contingent needs. In fact, it seems that steel mills are planning to halt production for extended periods between November and January, and, according to several contacts, the actual extent of these shutdowns may be decisive in determining in which direction the scrap market will move.
In the local scrap market in Spain, prices have remained stable over the past three weeks for HMS and shredded scrap, while turnings and old steel scrap have gained €10/mt. Demand from steel mills continues to be low, as does raw material consumption. Producers are planning major shutdowns for the coming months and some will end the year with a capacity utilization rate of less than 50 percent.
South Korean steelmaker POSCO has bid for Japanese scrap, keeping its bid prices stable week on week. POSCO has shared bids for Japanese HS grade scrap at JPY 51,000/mt ($334/mt) CFR. The producers’ offers for busheling (shindachi) grade scrap are at JPY 50,000/mt CFR or $327/mt CFR. POSCO’s bids for Japanese shredded scrap have moved sideways at JPY 49,000/mt ($321/mt) CFR.
Import scrap quotations in Taiwan have remained soft this week, in particular with offers from the US declining, while Japanese sellers have kept their offers relatively stable. “Taiwanese mills are still in mute mode because another strong typhoon has hit Taiwan this week,” a source reported. Typhoon Kong-Rey was equivalent to a Category 3 Atlantic hurricane, according to the Joint Typhoon Warning Center (JTWC), and was the strongest typhoon to hit the island in nearly three decades.
Offers for ex-US HMS I/II (80:20) scrap in containers have declined from the range of $333-335/mt CFR to $330-332/mt CFR. Offers for Japanese H1/2 (50:50) scrap bulk are still at around $330-332/mt CFR, a slightly lower level compared to last week’s $332/mt CFR.
Over the past week, import scrap offer prices to Vietnam have followed diverse trends. While Japanese scrap offers have moved up slightly week on week, ex-US scrap offers are now lower. Prices for Japanese H2 scrap to Vietnam have moved up by $5/mt over the past week to $340-345/mt CFR. Ex-US bulk HMS I/II 80:20 scrap offer prices are currently at $375/mt CFR, $5/mt lower than the prices recorded last week.
In the current week, Tokyo Bay FAS-based prices for H2 grade scrap are still at JPY 42,500/mt ($278/mt), stable week on week but down $2/mt on US dollar basis due to the changes in the Japanese yen-US dollar exchange rate. This level shows that FOB prices are at JPY 43,500/mt ($285/mt) for this grade, a $1/mt drop since last week.
In Bangladesh most offers for import scrap have remained relatively stable, though a number of suppliers have decided to go slightly lower, while bids have continued to decline even further given the sluggish demand in the country. At the same time, restrictions related to letters of credit (LC) have added to buyers' concerns, further suppressing interest in containerized scrap, while bulk offers from the US have seen limited interest in Bangladesh, as the main scrap consumers believe they can maintain sufficient inventories until December. The declining demand for long steel products, which rely heavily on scrap, has also led to fewer new inquiries. More specifically, offers for ex-EU/UK shredded scrap in containers have been voiced at $390-395/mt CFR, down by $10/mt week on week, while offers for ex-Australia shredded scrap have settled at $400-410/mt CFR, mainly the same as last week. According to sources, several deals for ex-Australia shredded scrap have been signed at $400-405/mt CFR levels, though a few deals have also been reported at $408/mt CFR. In the bulk segment, indicative offers for ex-US HMS grade scrap have been estimated at $385-388/mt CFR, down by $3/mt on the higher end of the range week on week, while shredded scrap offers have been assessed at $400/mt CFR and slightly above. Offers for ex-Japan H2 scrap have been heard at around $370-380/mt CFR, the same as last week.
The import scrap market in Pakistan has continued to remain under pressure from weak finished steel demand. At the same time, import scrap prices have kept declining slightly in new deals as buyers have been seeking lower costs. More specifically, offers for ex-Europe and ex-UK shredded scrap in containers have settled at $390/mt CFR, against $400-405/mt CFR last week. According to sources, several deals for around 3,000 mt of ex-UK shredded scrap have been signed at $390-392/mt CFR this week, down by $2/mt week on week. Besides, two or three more deals were booked for 2,000-3,000 mt in total from the UK and Europe at $385-388/mt CFR. At the same time, local demand for finished steel and for local scrap has remained sluggish this week, though several Pakistani steel mills have adjusted their local prices for rebar, raising them by around PKR 2,000-4,000/mt ($7-14/mt).