The relatively positive sentiments in Turkey’s import scrap market towards the end of last week have vanished rapidly this week. While deals from Friday, November 8, were disclosed earlier this week, the reaction of the market to the latest stimuli measures announced by the Chinese government last Friday was negative, as again expectations were too high with the reality lagging behind. Due to the threat posed by the Trump administration to Chinese products, global expectations for China’s stimulus package had been high.
As the week progressed, negative sentiment prevailed in Turkey’s import scrap market, causing workable price levels to fall, also with the US dollar hitting 1.05 against the euro. There have been several rumors of deep sea and short sea scrap bookings over the past two days, but most of them have been rejected by at least one of the supposed parties to the deals. October 2023 was the last time the euro was so weak against the US dollar. Despite the unconfirmed or rejected bookings, the acceptable price level in Turkey dropped by $5/mt on Thursday, November 14. This was followed by a confirmed ex-UK booking made by an Iskenderun-based producer with the HMS I/II 80:20 scrap price at $350/mt CFR. A German sub-collector reported on November 14 that EU-based export yards are bidding at €295/mt DAP for scrap, though the price is weak, commenting, “They bid €295/mt DAP today, but they also informed us that the price can move down quite fast. An export yard said they may cut prices by €5/mt tomorrow. There is no demand for scrap in the domestic market. Even the producers we usually work with are getting ready for an early holiday season. Hence, scrap flow is directed to exports, exerting pressure on prices.” Another source reported that DAP-based prices at export yards in the EU are currently at €280-290/mt.
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.
This week, local scrap prices in Italy have gained an average of €5/mt. However, the market does not present a homogeneous picture as some producers have conceded up to €15/mt more in spot contracts, while others have kept prices unchanged and are not willing to increase them.
Some traders are expecting major increases and are refraining from sales. Also, according to a source, “Supply is very limited, especially for new scrap because production is slow, but also for HMS.” On the other hand, some producers are not willing to increase scrap purchase prices.
According to various sources, most mills will shut down in the first week of December due to the expected increase in energy costs. In addition, many steel mills have announced shutdowns of three to five weeks over the Christmas holidays.
In Spain, local scrap prices have fallen over the past seven days. Steel mills in the south of the country, whose purchase prices were at the upper end of the range, managed to achieve a drop of €10/mt, as anticipated last week, while those in the north achieved a decrease of €5/mt. However, traders expect prices to return to higher values soon as scrap demand seems to be improving.
The Kanto scrap export tender in Japan closed with a price decline on November 12. The negative sentiment in the Asian scrap market has had an impact on Japanese scrap export prices. In the Kanto export tender, the highest bid was at JPY 45,180/mt FAS, JPY 500/mt lower than last month. The dollar-based price decreased from $307/mt to $293/mt FAS, taking into account the changes in the Japanese yen-US dollar exchange rate. Meanwhile, the market prices in the Kanto area are reported to be at around JPY 41,500/mt ($269/mt) FAS, JPY 3,000/mt higher than the price recorded last month.
South Korean steelmaker POSCO’s bids for Japanese scrap have been kept unchanged for the fourth week, with the dollar-based prices dropping week on week due to the depreciating Japanese yen. POSCO remains the only South Korean producer currently importing scrap, while it has cut its domestic scrap purchase prices.
POSCO has shared bids for Japanese HS grade scrap at JPY 51,000/mt ($327 334/mt) CFR, stable as compared to last week. POSCO’s dollar-based bids have declined by $7/mt since last week.
In the current week, import scrap offers to Taiwan have declined slightly, though Taiwanese producers show limited appetite for imports. Taiwanese mills have very limited sales. Buyers only buy what they need as the Chinese steel market is still dropping,” a Taiwanese source commented.
Offers for ex-US HMS I/II (80:20) scrap in containers have softened from the range of $322-325/mt CFR to $318-325/mt CFR. During the past week, the offer range for Japanese H1/2 (50:50) bulk scrap has narrowed back to $328-333/mt CFR. Last week’s upper end of $343/mt CFR has disappeared.
Over the past week, import scrap prices in Vietnam have dropped by $5-10/mt. However, little interest is shown now in lower prices. Against the advantage of the depreciating Japanese yen, freight costs are rising for Vietnamese buyers. Offers for Japanese H2 scrap to Vietnam have moved down by another $10/mt over the past week to $335-340/mt CFR. However, some buyers still confirm they have concluded ex-Japan bookings this week at $335/mt CFR for H2 grade. Ex-US bulk HMS I/II 80:20 scrap offer prices are currently at $365/mt CFR, $5-10/mt lower than the prices recorded last week.
Tokyo Bay FAS-based prices for H2 grade scrap have moved up by JPY 500/mt week on week to JPY 43,000/mt ($277/mt), down by $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 now at JPY 44,000/mt ($283/mt) for this grade, $3/mt lower than last week.