Global Ferrous Scrap Market Overview - Week 7, 2019

Global scrap prices exhibited mixed trends this week, however, indications of price correction in the near terms have started emerging towards the closing of the week. After restocking significant scrap cargoes, Turkish steel mills observed marginal correction in recent deals. Following jump in Kanto monthly export tender, Tokyo steel lifted scrap prices twice in Japan. Indian importers booked HMS scrap actively in the opening of the week while Pakistan and Bangladesh stayed deliberately working on high offers as sentiments remain bearish. Taiwan and Vietnam observed limited trades at high prices while scrap prices in US, China and South Korea remained more or less flat.

Turkey steel mills book limited cargoes, prices correct - Turkey steel mills having booked significant volumes in last two weeks, slowed down scrap purchases shifting their focus to sales of finished products. As per sources, prices showed correction by USD 4-5/MT on a W-o-W basis.

In recent deal heard, Iskenderun based steelmaker booked a cargo comprising 22,000 MT HMS 1&2 (75:25) at USD 320/MT and 5,000 MT of Bonus at USD 335/MT, CFR Turkey for March shipment. An Izmir region based steel mill booked a Baltic cargo comprising HMS 1&2 at USD 326/MT, CFR Turkey.

According to SteelMint's price assessment, US origin HMS (80:20) scrap inch down to USD 326-328/MT, CFR Turkey after climbing to levels USD 333-335/MT, CFR in the opening of the week. While HMS 1&2 (80:20) of Europe origin stands at around USD 321-322/MT, CFR.

Japan's monthly scrap 'Kanto Tender' fetches bid up USD 28/MT - Japan's monthly ferrous scrap export tender concluded on 13th Feb in the Kanto region. Total 20,000 MT H2 scrap auctioned in four winning bids presented at an average of JPY 31,855/MT (USD 288), FAS, up sharply by JPY 3,080/MT (USD 28) M-o-M against the average bid at JPY 28,775/MT (USD 266), FAS in Jan'19. Following tender's results above than expected, price expectations in the both local and export market have turned bullish in Japan despite South Korean importers stand sidelines at the moment.

Japan's Tokyo steel raised scrap prices twice this week - Tokyo steel made price hike for scrap after 5 months following higher Kanto tender. Prices at all five plants increased by a total 1,000/MT in two successive hikes made on 14th and 16th Feb'19. H2 price stands at JPY 32,000/MT (USD 290) and JPY 31,000/MT at Kanto based Utsunomiya and the largest plant, Tahara respectively. The selling price of H2 in Japan's local market stands in the range of JPY 30,500-31,500/MT, FoB. Despite tight supply and demand situation and low demand for high-grade scrap sentiments remained strong.

China's domestic scrap prices unchanged on falling Iron ore prices - China's largest scrap consumer, Shagang maintained scrap prices unchanged at RMB 2,650/MT inclusive of 16% VAT for HMS (6-10 mm thickness) in Zhangjiagang.

Indian importers actively book HMS scrap despite price rise - On improved sentiments in steel market and jump in secondary sector prices, India observed considerable HMS trades but participants turned slow in the second half of the week for more clarity. Dubai origin cargoes booked in the range USD 335-340/MT, CFR up USD 5-10/MT on a W-o-W basis for short term deliveries. After moving up sharply by around INR 700-800/MT domestic scrap prices have been corrected down again.

SteelMint's assessment for containerized Shredded stands in the range USD 345-350/MT, CFR Nhava Sheva, but hardly any major deal concluded. UK and South Africa origin HMS 1 was being offered at around USD 335-338/MT, CFR and assessment of West Africa HMS stand at around USD 320-325/MT, CFR.

Pakistan imported scrap trades limited on high offers - Asking rates for Shredded scrap reported in the range USD 340-345/MT, CFR Qasim. But no significant recovery in local steel prices and demand kept trade activities limited. Participants are expecting for slow improvement in local steel prices as the weather starts warming up and governments budgetary spending increases in the near terms but the possibility of another currency devaluation keeps market uncertain.

Containerized HMS 1 from Dubai sold at USD 330-332/MT, CFR Qasim and last Shredded trade heard at USD 337/MT, CFR Qasim this week, HMS scrap offers from Middle East and South Africa heard stable at around USD 330/MT, CFR. Pakistan steel melters association has presented a hike in electricity tariff rates by PKR 4/Unit. This may increase the cost of construction of 1 ton of billet by PKR 3,200/MT however, no impact has seen yet on local steel prices.

Bangladesh imported scrap trades slow amid lower domestic offers - Scrap yards based in Europe, UK and USA were quoting containerized Shredded scrap in the range of USD 355-360/MT, CFR Chittagong. However, buyers remain reluctant to buy amid dull local sentiments. Availability of local shipyard scrap remained cheaper amid decent inventories in hand. HMS 1 from South American countries like Brazil and Chile heard majorly in the range of USD 345-350/MT, CFR and at USD 350/MT from South Africa. Local HMS prices stand stable at BDT 35,500/MT. Shipyard scrap prices increased following supportive ship cutting market to BDT 37,500-38,000/MT, ex-Chittagong.