Weekly round-up: Global ferrous scrap prices show mixed trends w-o-w

This week, global ferrous scrap prices showed mixed trends. South Asian markets such as India, Pakistan, and Bangladesh experienced a downward trend due to a lack of buying interest, bid-offer disparities, a slowdown in the domestic steel market, tight cash flows, and softening global market sentiments.

In contrast, Japanese H2 scrap export offers edged up by JPY 200/t ($1.2/t) despite weak demand from key importing markets such as South Korea, Vietnam, and Taiwan, driven by the weakening of the JPY against the US dollar.

Meanwhile, China's leading steel mill decided to raise scrap procurement prices by RMB 50/t ($7/t) this week.

Turkiye: Turkish imported scrap prices remained largely stable as buyers quoted lower prices due to weaker domestic steel demand, while US recyclers resisted due to slow scrap inflows. This resulted in six to seven cargoes being booked from the US and EU regions.

According to a mill source, "Recyclers want higher prices, which is not viable for steelmakers in a bearish market with tight margins for rebar sales. Therefore, there's no justification for scrap price increases."

BigMint's assessment for US-origin HMS (80:20) bulk scrap remained stable at $379/t CFR w-o-w.

Turkish exported rebar stood at $580-585/t FOB. The scrap-to-rebar spread was assessed at $200-205/t FOB, remaining range-bound compared to the previous week.

India: In India, demand for imported scrap remained sluggish this week due to bid-offer disparities and expectations of a decline in offers amidst softening global scrap market sentiments. On a weekly average basis, shredded scrap offers from the US and Europe dropped by $8-10/t, reaching $414/t CFR from the US and $418/t CFR from Europe.

HMS (80:20) offers averaged $401/t CFR (a decrease of $4/t w-o-w) from Europe and $400/t CFR (a decrease of $6/t) from West Africa.

Notably, around 16,000 t of mixed scrap were booked during the week by multiple Indian mills. These included shredded scraps, HMS 80:20, HMS 90:10, HMS handloaded, NTP scraps, as well as blue steel scraps from various locations such as the US, Australia, the UK, Malaysia, Bahrain, West Africa, and Yemen.

Pakistan: Imported ferrous scrap prices in Pakistan dropped by $4/t over the past week as steelmakers were hesitant to buy raw materials at higher prices amid weaker rebar and billet sales. Local scrap prices also fell due to sluggish demand and production cuts. The weekly average offers of shredded scrap from the UK/Europe were assessed at $418/t CFR, with some buyers still meeting regular requirements despite production being below 40%. Other buyers are taking a wait-and-see approach

A steel mill official stated, "Buying activity is non-existent, and market sentiments are extremely poor. With Eid holidays approaching, there will be no work for the next one to one-and-a-half months. Production levels are down to 30%, and we plan a two-week shutdown during Eid. There is also a significant price gap of almost $20/t between domestic and imported scrap."

Bangladesh: In Bangladesh, market activities remained slow as buyers showed limited interest due to a slowdown in the domestic steel market and tight cash flow constraints.

According to a major mill source, "No prominent bookings have been made by us recently. However, offers from Australia were at $410/t for HMS mixed grade, while shredded was at $425/t CFR Chattogram."

On a weekly average basis, shredded scrap offers from the UK/Europe stood at around $422/t CFR Chattogram, down by $3/t. Meanwhile, HMS (80:20) offers edged down by $2/t to $405 /t CFR w-o-w.

Japan: This week, Japanese H2 scrap export offers inched up by JPY 200/tonne ($1.3/t) despite sluggish demand from key importing markets. According to BigMint's latest assessments, Japanese H2 scrap export offers stood at around JPY 51,900/t ($33/t) FOB Tokyo Bay, compared to JPY 51,700/t ($329/t) FOB the previous week. The uptick in offers was attributed to the weakening of the JPY against the US dollar.

Furthermore, in Japan's Nagoya region, the steel scrap market took a wait-and-see approach, with H2 scrap prices assessed at JPY 36,000-37,000/t ($229-236/t) and no recent changes.

South Korea: South Korean mills showed limited interest in imported scrap, particularly for HMS (80:20). However, there was a slight increase in traction towards importing shredded scrap during the week. Consequently, a deal for shredded scrap was reportedly concluded at JPY 57,500/t ($366/t) CFR, though the exact quantity could not be verified at the time of publishing this report.

Furthermore, this week, the ferrous scrap inventory at eight South Korean steel mills declined by around 2% to 783,000 t.

Vietnam: Japanese H2 scrap offers to Vietnam increased by $5/t to $375/t CFR, up from $370/t CFR a week ago. However, Vietnamese mills are currently unable to purchase due to the VND's depreciation against the dollar, making imports more expensive. Additionally, domestic scrap prices were reduced during the week, with mills prioritising billet sales as rolling billets into finished steel proved more cost-effective. Prices of domestic type 1 or H2 equivalent scrap for the 3-6mm grade dropped by VND 100/kg to VND 9,600-9,900/kg in northern Vietnam and VND 8,900-9,000/kg in the southern region.

As per mill side sources, local scrap prices are down by about VND 100/kg due to low demand, so imported scrap needs are less. Some mills are opting to buy induction furnace billets to roll into finished products instead.

China: Shagang Steel recently announced an increase in purchasing prices of ferrous scrap across all grades, effective as of 22 May 2024. The updated prices reflect a rise of RMB 50/t ($7/t). Under the revised pricing structure, HMS (6-10 mm) now stands at RMB 2,850/t ($394/t), including 13% VAT. This adjustment follows a previous price decrease of RMB 30/t enacted on 16 May.