WEEKLY SCRAP WRAP: Dip in deep-sea purchases prices repeated in some domestic markets

Turkey’s steel mills continued their deep-sea purchases for June this week with prices showing a slight decrease, while Taiwanese import and US export prices were holding stable.

Meanwhile, Indian import prices went down during the working week from Monday May 15 to Friday May 19 as buyers stayed out of the market over fears that markets could collapse during the slowdown in the Islamic holy month of Ramadan.

Turkey imports
Turkish steel mills have booked three deep-sea cargoes this week, totalling 92,000 tonnes.

Two Baltic Sea cargoes were booked earlier in the week, while a US one was sold on May 18.

A steel producer in the Marmara region booked a Baltic Sea cargo, comprising 29,000 tonnes of HMS 1&2 (80:20) at $272.50 per tonne and 6,000 tonnes of bonus at $282.50 per tonne cfr.

Another steel mill in the Iskenderun region booked a second Baltic Sea cargo, comprising 21,000 tonnes of HMS 1&2 (80:20) at $272 per tonne and 6,000 tonnes of bonus at $282 per tonne cfr.

A steel producer in the Iskenderun region booked the US cargo, comprising 16,000 tonnes of HMS 1&2 (80:20) and 14,000 tonnes of bonus, at an average price of $278 per tonne cfr.

Finished steel demand in the Turkish domestic market, especially for rebar, was strong and this was helping Turkish steel producers to continue to book deep-sea scrap.

"The domestic rebar supply is getting tighter," a Turkish source said, "and this is encouraging mills to continue to book scrap."

However, the most recent deal sent the daily indices down by around $2-3 per tonne, following the US anti-dumping decision and because of the approach of Ramadan.

"I think the new anti-dumping decision has to do with lower scrap prices, along with slow finished steel exports. Mills are not willing to pay a premium for deep-sea scrap at the moment," a trading source said.

"The slowdown in exports was the result of the approach of Ramadan," another source said.

Ramadan, with its typical slowdown in commercial activity, starts on May 26 in Turkey and will last for around a month.

USA exports
Turkey made a fresh deal for a US East Coast bulk cargo of cut grades of ferrous scrap on May 18, with the price for HMS 1&2 (80:20) failing to break the $275-per-tonne ceiling.

These prices were down by $0.77 per tonne from the preceding cargo sale on May 5 at $274 per tonne cfr for a 40,000-tonne cargo of HMS 1&2 (80:20).

Turkish steelmakers have been snubbing shredded scrap and have shown a preference for cut grades in recent purchases. Shredded scrap was also conspicuously absent from two Baltic Sea cargoes purchased early this week at $272 and $272.50 per tonne cfr.

This was not good news for shredded scrap in the US coastal region, which could head into oversupply. Sources believed there was a lot more shredded scrap generated in the US Northeast than other grades.

A number of US mills have been hungry for cut grades as well, and have adjusted their scrap preferences in recent months. With prime grades in tight supply, domestic US mills have shown increased demand for higher-quality cut grades.

"Some [US Northeast] mills closed their shred buys pretty quickly this month," a broker source said, "but they are still looking for HMS material and P&S scrap."

Taiwan imports
Import prices for USA-origin containerised HMS-grade ferrous scrap in Taiwan have not changed this week, even though there was downward pressure from competitive offers out of Japan.

As happened last week, Japanese H2-grade bulk cargoes were heard sold this week at prices around $240 per tonne cfr, traders and buyer sources said.

"Japanese scrap is becoming more competitive," one trader said.

Most scrap deals closed this week in Taiwan were for Japanese cargoes, including higher-grade material such as Shindachi.

Small deals for HMS 1&2 (80:20) containers from the USA have also been made this week, at prices as high as $238-240 per tonne cfr, sources reported.

Smaller cargoes were heard traded at less than $235 per tonne cfr, but such prices were widely considered not to be representative of the market at the moment.

Meanwhile, the Taiwanese market has been "flooded" by competitive offers from China, following news that a few local buyers booked trial Chinese cargoes in recent weeks.

"There’s a lot of offers from China now, but most buyers in Taiwan are waiting for the trial cargoes to arrive first," a second trader in Taiwan said.

India imports
Fears that the Ramadan religious holiday in Islamic nations will trigger a fall in global scrap prices led to many Indian buyers being unwilling to risk purchasing material at this week’s prices, Metal Bulletin learned on May 19.

Sellers reduced their offer prices for imported HMS 1&2 (80:20) and shredded scrap in an attempt to secure some bookings, but little market activity was heard.

"There’s not much buying [as] buyers expect a [price] correction of $15-20 per tonne," one Indian seller said. "They might start chasing orders [after the price drop] but, before then, it will be difficult."

"Lots of things are happening around the globe – people [are] not sure which way it will go. [When] people don’t know, there is a tendency to slow down," the second seller said.

Metal Bulletin’s index for containerised shredded scrap imports in India closed at $295.12 per tonne cfr Nhava Sheva on May 19, down by $6.39 per tonne compared with $301.51 per tonne cfr the previous week.

Although some offers were heard as low as $290 per tonne cfr Nhava Sheva, there were transactions closed at levels higher than this, suggesting that market participants had differing views of the true market level.

One deal for UK-origin shredded material was heard at $292-295 per tonne cfr Nhava Sheva, while another deal for unknown-origin material was closed at $299 per tonne cfr.

CIS exports
Turkish steel producers were also active in the short-sea markets this week.

Russia-origin A3-grade scrap was heard selling to Turkey at $259-260 per tonne cfr this week.

Turkey domestic
Turkish domestic scrap prices continued to rise at the beginning of the week, in line with the strengthening imported scrap values in the previous week and firm domestic demand for finished steel.

"Domestic rebar sales are still very strong and the prices are rising every day. Imported scrap prices are also rising, which [is leading to] an increase in domestic prices," a source at an Izmir mill said on May 15.


 

Cem Turken

cturken@metalbulletin.com

Published

Cem Turken

May 19, 2017

16:52 GMT

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