Global Ferrous Scrap Market Overview - Week 26, 2019

Global ferrous scrap prices observed mix trend this week. Turkey has observed rebound by USD 12-13/MT in recent deals, following which global offers from US and European markets likely to revive reflecting in an increase in imported scrap prices in South Aisa and East Asia in upcoming days. On the other hand, still weak US West coast offers and Cheaper Japanese scrap prices likely to limit the sharp rise further. Tight supply and improving profit margins have resulted in a jump in domestic scrap purchase prices in China.

Turkey - Imported scrap prices rebound sharply by USD 12-13/MT against last week in Turkey, as steel mills have returned into the market with August shipments. This brings positivity in the global scrap market.

After remaining silent early week a UK cargo booked towards the closing of the week, comprising 22,000 MT of HMS 1&2 (80:20) at USD 293/MT, 15,000 MT Shredded at USD 298/MT and 5,000 MT of Bonus at USD 303/MT, CFR Turkey. While the Marmara based steelmaker booked 26,000 MT HMS 80:20 at USD 294/MT and 4,000 Bonus at USD 299/MT, CFR.

SteelMint's assessment of US origin HMS 1&2 (80:20) scrap stands at USD 293-294/MT, CFR Turkey, up by USD 12-13/MT on the week. while assessment of European origin HMS stands at USD 288-289/MT, CFR Turkey.

Japan - For the 3rd successive week, Japan's Tokyo steel lowered the domestic H2 scrap purchase twice, as the company has now observed 7 price cuts in Jun'19. After the recent price lowering, the company is paying JPY 26,500/MT (USD 261) for H2 scrap delivered at Tahara plant in central Japan and for Utsunomiya plant in Kanto region, while JPY 26,000/MT (USD 252) for Okayama plant. Low production by EAF steelmakers and weak demand from overseas importers of Japanese scrap is expected to keep sentiments

China - Chinese EAF steelmaker Shagang Jiangsu Steel announced a price hike for purchase of domestic steel scrap (all grades) by RMB 70-100/MT (USD 10-15) effective from 29th Jun'19, as tightness in supply of domestic scrap persists amid seasonal concerns while imported iron ore prices continue to remain high. With the said price hike, Shagang Steel will pay RMB 2,700-2,730/MT (USD 393-398) inclusive of 13% VAT for HMS (6-10 mm thickness) delivered to headquarter works in Zhangjiagang north of Shanghai in China, against the last report's price of RMB 2,630/MT.

South Korea - Hyundai Steel did not bid for Japanese scrap this week. In the latest booking reported, the company heard to have booked 50,000 MT of H2 from Japan. H2 bid was at JPY 28,000/MT, FoB last week. The domestic scrap prices witnessed downtrend on account of oversupply in the market. It was heard that Hyundai Steel will be repairing its EAF furnace from 21th June for 2 weeks and prices might inch up, however, confirmation was awaited. South Korean importers heard to be negotiating for US Bulk HMS 1&2 at around USD 295-300/MT, CFR South Korea.

Taiwan - Imported scrap prices had seemed to drop another USD 5-10/MT to USD 270/MT, CFR Taiwan for US origin HMS 1&2 80:20. Leading steelmaker Feng Hsin has lowered its domestic scrap buying prices twice observing a total drop of TWD 400/MT to TWD 8,700/MT for HMS 80:20 delivered to plant. Seasonal rains continue to hamper domestic demand for long steel products, seeing rebar prices to all year low so far.

Vietnam - Offers for bulk shipments from Japan and Hong Kong reported a successive drop. The price for HMS 1&2 (50:50) from Hong Kong is around USD 295/MT, CFR. Japanese export prices fell further as HS and Shindachi price in bulk to Vietnam is heard USD 330/MT and H2 price around USD 285-290/MT, CFR Vietnam.

Indonesia - Indonesian buyers were not very active this week. Prices assessed almost stable for Busheling around USD 338-340/MT; P&S at USD 325-330/MT, and Shredded scrap at around USD 300-305/MT,CFR Jakarta. Along with the improvement of steel price in China, it is being believed that the market is in the bottom and it should rebound soon.

India - Indian imported scrap market remained almost quiet with very limited trades reported this week. however, concerns on US-China meet, lack of clarity on budget, weakened domestic steel prices and the arrival of monsoon kept sentiments non-viable for scrap imports.

SteelMint's assessment for containerized Shredded from Europe, UK and US slightly improve to USD 315-318/MT, CFR Nhava Sheva. However, no major deal reported in the market. Few trades for low priced scrap were reported in the opening of the week.

UK origin Turning scrap sold at USD 265-270/MT, CFR and HMS offer stood in the range of USD 300/MT, CFR. South African HMS 1&2 was reported at around USD 315/MT, CFR. On improved domestic demand Dubai based scrap sellers remain mostly away from offering much with HMS 1&2 assessment at around USD 310/MT, CFR. West Africa HMS is at around USD 290-295/MT, CFR.

Pakistan - Pakistan's currency hit a record high of 163 against USD this week. Offers for imported scrap inched up following the global trend. Suppliers remained watchful for the price trend keeping inventories mostly deficient and restocking can be expected in the coming weeks.

Assessment for containerized Shredded 211 scrap from US and UK now stands at USD 315-317/MT recovering by around USD 5/MT, while few deals at USD 312-315/MT levels were reported earlier in the week. Dubai origin HMS 1 offers assessed at USD 320/MT, CFR while HMS 1 of UK origin at USD 310/MT, CFR Qasim.

Finished steel prices are likely to jump further on 17% FED's implementation from next week. Domestic steel prices are expected to jump sharply following recent currency depreciation by 4-5% keeping domestic situation uncertain.

Bangladesh - Imported scrap offers continued to decline as offers softened further. New tax tariffs announced on raw materials concerned the steelmakers as finished steel prices likely to increase significantly with the implementation of VAT.

Assessment for containerized Shredded scrap from North America & Europe stands at USD 325-330/MT, CFR Chittagong, slightly down against last week. Offers for South American HMS in containers currently reported in the range of USD 315-318/MT, CFR Chittagong while lower grade European HMS 1&2 at USD 310-313/MT, CFR. P&S offers reported at USD 330-335/MT amid very few offers available while local scrap was assessed at BDT 34,000-34,500/MT,ex-Chittagong.