Weekly round-up: Global ferrous scrap prices slightly up w-o-w except in India

Global ferrous scrap prices showed a mixed trend as in South Asia, Indian buyers remained moderately active in imported scrap with mismatchings in bid-offer levels, and domestic steelmakers seek cheap metallics alternatives to maintain the scrap-to-finished spread.

Pakistani and Bangladeshi scrap prices remained largely stable with declining steel demand in Bangladesh and liquidity concerns in Pakistan. Turkish imported ferrous scrap prices from the US and Europe rose by $4/t, with recyclers returned to purchase remaining vessels for July shipments.

In Vietnam, mills' interest in Japanese scrap remained subdued due to weak downstream demand, with demand for ferrous scrap remaining sluggish and major mills keeping their scheduled maintenance during the off-season. On the other hand, Japan's H2 scrap export offers rose due to the depreciation of the JPY against the US dollar.

Turkiye: The Turkish imported ferrous scrap market saw active bookings in late June as mills returned to secure scrap for July shipments. During a recent 10-day holiday, Turkey refrained from deals but re-entered the market needing 8-10 cargoes. Despite rising scrap prices, weak demand caused Turkish rebar prices to soften, dampening hopes for a strong scrap price recovery.

Suppliers raised prices due to higher freight rates, with a $4-5/t increase. The target price for US-origin HMS (80:20) is around $393/t CFR, but buyers resisted this range. The sustainability of this uptrend will be tested as mills negotiate August shipments, currently resisting the $390/t CFR mark for premium HMS (80:20).

In short-sea deals, Turkish mills bought Greek HMS (85:15) at $380/t, with other deals from Romania and Bulgaria at $365-368/t CFR.

BigMint's assessment for US-origin HMS (80:20) bulk scrap is $390/t CFR, up $4/t w-o-w, and $364/t FOB from the US East Coast, up $5/t w-o-w. The scrap-to-rebar spread narrowed to $188-190/t FOB.

India: This week, demand for imported scrap in India remained weak due to an unsupportive steel market and the availability of alternative metallics. Despite firm offers from suppliers, workable levels for the US and the UK/European shredded scrap softened to $410-414/t CFR Nhava Sheva, while HMS (80:20) from the UK/Europe and West Africa was at $385-389/t CFR, with buyers quoting around $400-404/t.

The upcoming rainy season in major Indian regions is also expected to impact scrap buying in the near term.

A trade source noted that high freight rates, along with pellet and sponge offers, are capping imported scrap rates, leading to a likely decrease in import volumes through containers. Some volume is expected to shift to bulk shipments, pellets, or lump sponge alternatives.

Recent containerised scrap deals include 1,000 t of HMS (80:20) scrap from West Africa at around $395/t CFR, 1,000 t of Yemen-origin HMS-LMS bundle mix at $385/t, and 500 t of HMS (80:20) from West Africa at $402/t CFR Nhava Sheva.

Additionally, a bulk scrap cargo from Richmond Port, San Francisco, is set to arrive at Chennai Port by 29 June 2024. This shipment, booked by a Chennai-based steel mill, consists of approximately 30,000 t of mixed scrap, primarily shredded and bonus scrap.

Pakistan: The imported ferrous scrap market in Pakistan remained slow with minimal deals heard as sluggish demand kept steel mills less active and operating at one-third of their production level.

According to a source, the steel market is experiencing an upward price trend due to increased taxes and other charges introduced in the budget. However, the overall situation remains challenging as liquidity issues persist. Additionally, many clarifications are still awaited, contributing to the ongoing uncertainty.

A market participant commented,"Buyers are cautious with their purchasing prices, anticipating potential demand fluctuations in the coming month as the government reviews steel mills and aligns investments with IMF advice."

BigMint's assessment for the UK/Europe shredded scrap stood at $423/t CFR Qasim, largely stable w-o-w.

Around 3,000-4,000 t of shredded scrap from the UK and the UAE were booked at $422-425/t CFR Qasim in the last seven days.

Bangladesh: Imported containerised ferrous scrap offers to Bangladesh from the UK (shredded, HMS (80:20)) remained stable w-o-w, while bulk scrap offers from the US (HMS 80:20) rose by up to $4/t. A bulk scrap cargo from the US West Coast was booked for Bangladesh at $400/t for HMS and $405/t for shredded, estimated for August shipment. Despite supportive prices, bearish market sentiments and high freight rates dampened interest in containerized scrap.

Market insiders report bulk inquiries from major Bangladeshi steel mills due to the limited availability of containers. The domestic steel market is sluggish due to the rainy season, prompting buyers to procure imported scrap only as needed. Before Eid, many buyers restocked, leading to a temporary scrap shortage. Letters of credit (LC) issues have now eased. Domestic rebar prices are BDT 88,500/t ex-Dhaka and BDT 92,000/t ex-Chattogram, while billet prices range between BDT 75,000 and 76,000/t exw.

Japan: Japan's H2 scrap export offers rose by JPY 700/t ($4/t) over the past week due to the depreciation of the JPY against the US dollar. However, demand from key importing nations remained subdued due to slowdowns in their domestic markets.

This increase in export offers was due to recent price hikes by Tokyo Steel, a leading Japanese EAF steel producer. FAS collection prices in Tokyo Bay rose slightly to a range of JPY 50,000-51,500/t ($311-321/t) from the previous week's range of JPY 49,500-51,000/t ($308-318/t).

BigMint's weekly Japanese H2 scrap export offers stood at JPY 50,500/t ($315/t) FOB Tokyo Bay, up from JPY 49,800/t ($310/t) FOB in the previous week.

Notably, Tokyo Steel raised scrap purchase prices by JPY 1,000/t ($6/t) at Tahara, Utsunomiya, and Nagoya plants. Meanwhile, prices at the Kansai plant were dropped by JPY 500/t ($3/t) to JPY 51,000/t ($319/t).

Vietnam: Vietnamese mills showed little interest as the finished steel sector has been underperforming due to the monsoon season and sluggish construction activities. Offers for H2 scrap were at $365-$370/t CFR Vietnam unchanged from last week while buyer indications for H2 grade were at $360/t CFR Vietnam.

South Korea: The combined ferrous scrap inventory of eight major South Korean steel manufacturers was 788,000 t, with a slight decrease of 2,000 t. Inventory changes varied by region, with slight increases in the south and decreases in the central region. Major steel mills, including Daehan Steel and YK Steel, plan to reduce scrap prices by KRW 10,000 ($7/t) from 2 July 2024. Previously, Korean Steel, Korea Special Steel, and Hyundai Steel reduced scrap purchase prices by the same amount, effective 27 June 2024, and 1 July 2024, respectively.