Global Ferrous Scrap Market Overview - Week 3, 2019

This week observed mixed trends in global scrap markets with Turkey scrap prices surprisingly jumped in recent deals while Asian scrap prices continued a downward correction. South Korean steel mills booked another 3-4 bulk cargoes from the US and Japan again this week. Japanese export prices come under pressure on weak demand. Vietnamese importers booked scrap cargoes at corrected prices while Shredded scrap prices found a ground in South Asian countries like India, Bangladesh and Pakistan. Limited trades of HMS reported at stable prices but sellers turn non-aggressive in offering much towards the closing of the week. Chinese scrap prices rebounded on tight supply amid anticipation of a lift after spring festival witnessing price hikes from leading scrap consumers.

Turkish scrap prices up on higher collection rates - Steel mills in Turkey observed a jump in the scrap prices to meet their urgent needs. Worsening winter conditions led suppliers to raise offer levels by USD 6-8/MT against last weeks' report on tight supply. In a most recent deal reported, a steelmaker in Izmir region booked 25,000 MT of HMS 1&2 (80:20) at USD 283/MT and 5000 MT of Shredded at USD 288/MT, CFR Turkey. While a Canadian cargo sold earlier comprising 17,000-20,000 MT HMS 1&2 (90:10), 5,000 MT P&S and remaining Shredded at an average price of USD 294/MT, CFR.

SteelMint's price assessment of HMS (80:20) for US origin scrap stands at around USD 285-288/MT, CFR against USD 280/MT, CFR reported last week. While assessment of HMS 1&2 (80:20) of European origin remained stable at USD 275-278/MT, CFR.

Japan's Kansai tender bids inch down in Jan'19 - Japan's Kansai ferrous scrap export tender for Jan'19 observed average bids down just JPY 139/MT on a monthly basis. A total 50,000 MT H2 scrap auctioned to South Korean importer at an average of JPY 28,710/MT (USD 262), FAS in Jan'19. Tokyo Steel kept prices unchanged over the week at all five works with Utsunomiya price at JPY 31,000/MT (USD 282).

Hyundai Steel had booked Japanese H2 at JPY 29,000/MT, FoB down JPY 500/MT against last week and now eyes for JPY 28,500/MT, FoB in the near term. Japan's local scrap prices likely to see downward pressure amid average index reported by Japan Steel Association at JPY 28,100/MT (USD 256), down JPY 600/MT W-o-W.

South Korean steel mills book 150,000 MT US bulk scrap over the week - Hyundai Steel booked two more US bulk scrap cargoes comprising total 85,000 MT HMS 1 equivalent at USD 302/MT, CFR South Korea each for Mar'19 and Arp'19 deliveries. SeAH and Korea Steel booked mixed cargoes of 35,000 MT and 32,000 MT each for Mar'19 shipment. Steelmakers see US scrap prices less around USD 20/MT against current Japanese prices and plan to cut bids for Japanese scrap.

South Korean domestic scrap market also observed an increase in the volume of distribution this week and leading steel mills lowered domestic scrap prices by KRW 10,000-20,000/MT (USD 9-18) recently.

China's Shagang Steel raised scrap prices by USD 12 - China's largest scrap consumer, Shagang Steel lifted scrap purchase prices by RMB 80/MT to RMB 2,650/MT (USD 391) inclusive of 16% VAT for HMS (6-10 mm thickness) in Zhangjiagang. According to reports, although the market is projected to be bullish after the spring holiday on low inventory pressure, the traders are still recommended to stay cautious in an unclear trend of the spot market. In short, the trend of steel scarp still hinges on the profitability of the steel mills.

Imported scrap trade prices correct in SE Asia - A leading steel mill in Southern Vietnam booked a Japanese bulk scrap cargo comprising 17,000 MT H2 at USD 297/MT, CFR Phu My. Northern region based steel mill booked a Hong Kong origin HMS 1&2 (50:50) cargo at USD 301/MT, CFR Hai Phong. US origin containerized Shredded scrap was traded in the range of USD 300-305/MT, CFR Indonesia. Price assessment for USA origin HMS (80:20) stands at around USD 260-265/MT, CFR Taiwan in containers, down USD 5/MT against the last week's report. Limited trades reported as finish steel demand hasn't picked up yet.

Indian imported scrap prices stable in recent deals - Indian imported scrap market observed limited trades seeking more clarity on global prices. Shredded scrap is being offered at stable levels however, HMS prices from UK/Europe and West Africa showed sliding down on W-o-W. Domestic scrap prices weakened further on dull local fundamentals and finished steel demand.

SteelMint's assessment for containerized Shredded stands in the range USD 320-325/MT, CFR Nhava Sheva. Couple of trades reported for containerized Shredded of UK/US origin in the range USD 320-325/MT, CFR. Dubai HMS 1 assessed at around USD 318-320/MT and assessment of HMS 1&2 from UK/Europe and West Africa stand USD 300-305/MT, CFR and USD 300-310/MT, CFR depending on quality.

Pakistan imported scrap prices stable, local steel market eyes improvement - Scrap suppliers turn a bit resistive to offer much to Pakistan after a jump in global prices. Scrap restocking for Feb-Mar'19 delivery is likely to pick up at improved prices in the near term. Asking rates for containerized Shredded stand in the range of USD 318-323/MT, CFR Qasim and limited trades of Shredded 211 reported in the range USD 315-318/MT, CFR. Dubai origin HMS 1 was being offered at around USD 320-322/MT, CFR Qasim. The domestic market has stabilized and remained positively waiting for Mini budget to be announced next week. Ship breaking industry remained in hibernation situation amid most of the tonnages being sold to Bangladesh and India.

Bangladesh observed scrap bookings at stable prices - Strengthening local finish steel demand and gaining momentum in construction projects kept Bangladesh scrap importers active in the market. Shredded scrap in containers continued being traded in the range of USD 325-330/MT, CFR Chittagong. HMS 1 from the Middle East and other origins like Chile and Brazil traded in the range USD 315-320/MT, CFR and HMS 1&2 of US/UK origin at USD 310-315/MT, CFR Chittagong. Offers from Brazil for P&S stand at around USD 345/MT, CFR. Latest Indian sponge iron export deals reported at USD 330/MT, CFR Chittagong down USD 10/MT on W-o-W.