Global Ferrous Scrap Market Overview - Week 34, 2018

This week observed mix trends in global imported scrap market. Activities slowed down on account of holidays for religious festival Eid-al-Adha in Turkey, UAE, Pakistan and Bangladesh. On the other hand, Indian imported scrap prices stand stable in decent purchases made with improvement in sentiments this week. South Korean major steelmakers continued booking USA bulk scrap for October shipments instead of costlier Japanese scrap. Tokyo Steel hiked prices twice this week on the back of increase in Japanese scrap prices on tight availability. China's Shagang steel raised scrap prices further amid increasing finish product prices. Taiwan and Vietnam scrap prices remained almost unchanged with bookings remained subdued for time being.

Japan's Tokyo Steel hikes scrap purchase prices twice this week - Leading EAF steel mini-mill - Tokyo Steel has raised prices twice on 22nd and 24th Aug'18 amid increasing supply tightness in Japan. Now it fetches H2 at JPY 38,000/MT (USD 345) for its Kanto region based works i.e. Utsunomiya and at JPY 36,500/MT for largest works in central Japan-Tahara. Notably, prices at Utsunomiya plant have crossed JPY 37,500/MT mark the first time in more than last one years' time.

With increasing demand for restocking of scrap amid increased operating hours on low electricity charges Japanese scrap prices have climbed high. While exports remain sluggish amid slowdown in demand from South Korean importers, low global prices compared to Japanese prices and mismatch between sellers' expectation and buyers bidding.

South Korean steelmakers prefer USA bulk cargoes over Japanese scrap - Major EAF steelmakers in South Korea have shifted their attention from Japanese scrap to USA bulk scrap in order to stabilize supply-demand for October month. Hyundai Steel and Dongkuk Steel have suspended bids for all grade of Japanese scrap for another week as prices have gone above expectation levels now. SeAH Steel has contracted for US scrap first time in last 5 years after observing successive bulk cargoes for Sept-Oct'18 shipments by Hyundai and Dongkuk since last few weeks. SeAH Steel booked USA bulk vessel comprising 32,000 MT of Shredded scrap at USD 362/MT, CFR South Korea.

Turkish market stays sidelines as Asian prices fall - Turkey based buyers remained away from buying imported scrap amid market uncertainty and EID holidays. After observing couple of deals for European HMS (80:20) at USD 280/MT, CFR, a single deal heard to have concluded at slightly higher prices equivalent to USD 310/MT in the market recently however no confirmation received on it. According to SteelMint's assessment, the price assessment stand stable for USA origin HMS (80:20) at around USD 300/MT, CFR Turkey. The premium for HMS 1&2 (80:20) scrap for USA over European origin stands at USD 8-10/MT. Lira recovered back slightly to 6.02 levels today after hitting all time low at 7 against USD two weeks' ago.

China's Shagang Steel hikes scrap purchase prices further - Following hike in long steel prices for late August shipments by RMB 100-150/MT, Shagang has raised its scrap purchase prices by RMB 100/MT amid increased scrap usage on environmental regulations. Shagang is now paying RMB 2,690/MT (USD 393) inclusive of 17% VAT for HMS (6-10 mm in thickness) delivered to its headquarter works situated in Zhangjiagang province in China, up RMB 100/MT as against last report of RMB 2,590/MT. The scrap prices have surpassed the last highest peak achieved at RMB 2680/MT on 22nd Dec'17 climbing 8 months' high. Notably, the company has witnessed four successive price hikes since 28th July.

Indian imported scrap prices stable with improving sentiments - Indian scrap importers have observed decent bookings in containers in last two weeks at almost stable prices. Price assessment of UK/Europe origin containerized Shredded scrap stands at USD 340-345/MT, CFR Nhava Sheva. HMS 1&2 (80:20) heard to have booked at stable price of USD 335-340/MT from UAE and at around USD 325/MT from UK/Europe. HMS 1 assessed at around USD 340-350/MT, CFR Nhava Sheva depending on origin.

Domestic scrap prices moved up in all major regions in India, narrowing down the price gap between imported and domestic scrap further. Local HMS 1&2 (80:20) prices assessed at INR 25,600-25,800/MT (USD 367-370), up INR 500/MT W-o-W in Mumbai, while at INR 24,100/MT, up 500/MT on W-o-W ex-Chennai basis, GST @ 18% extra.

Taiwan imported scrap prices inch down on slow demand - Price assessment for US origin HMS (80:20) stands at USD 321/MT, CFR Taiwan in containers. Demand remains slow over less clarity on global market.

Bangladesh and Pakistan markets remain close on EID holidays - Imported scrap prices in Pakistan & Bangladesh moved down USD 8-10/MT W-o-W on subdued demand before observing closure for EID holidays. Shredded 211 offers from the UK assessed in containers at around USD 350/MT, CFR Chittagong and USD 335-340/MT, CFR Qasim from recyclers in UK/USA. HMS 1 from Dubai and South Africa was being offered at USD 335-340/MT, CFR Qasim and HMS 1&2 (80:20) offers from Europe & Brazil remain in the range of USD 330-335/MT, CFR Chittagong. Local markets remain close over EID holidays in both the countries at almost stable prices. Importers are likely to resume activities in upcoming week supported by increasing activities and sentiments in local markets.