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

The global ferrous scrap market exhibited mixed trends, with some markets experiencing a minor decrease of up to 2%. In the South Asian region, Indian buyers were comparatively more active than those in Pakistan and Bangladesh. However, the overall pace was slow due to domestic market volatility and a slowdown in finished steel sales. In Pakistan, buyers remained muted due to the gap between domestic and imported scrap prices. Meanwhile, Bangladeshi buyers slowed their purchases, waiting for clearer price directions amidst the softening of global scrap prices.

In other regions such as Japan, South Korea, and China, market conditions varied. Japanese export offers remained unchanged w-o-w due to a lack of buyer interest from key importing markets, influenced by higher offers and lower bids. In China, Shagang Steel reduced scrap procurement prices by RMB 50/t ($7/t). South Korean mills continued to procure from the domestic market, finding it more cost-effective.

Turkiye: Turkish steel producers secured several deals towards the end of this week, with seven to eight cargoes booked for early June shipments from the US and Europe. In total, approximately 15-17 bulk cargoes have been booked for June shipments this month.

According to BigMint's assessment, US-origin HMS (80:20) bulk scrap is priced at $380/t CFR, showing a slight decline of $2/t w-o-w. Similarly, HMS (80:20) from the US East Coast is assessed at $356/t FOB, down $2/t w-o-w.

Turkish exported rebar stands at $585/t FOB, with the scrap-to-rebar spread assessed at $205/t FOB, remaining largely stable compared to the last week.

India: In India, demand for imported scrap remained moderate as buyers engaged in need-based purchasing due to domestic market volatility. This volatility stemmed from slow finished steel sales and ample stockpiles booked in the previous month. Notably, compared to other South Asian markets like Pakistan and Bangladesh, Indian buyers remained relatively active.

On a weekly average basis, shredded scrap offers from the US and Europe remained largely stable at around $424-427/t CFR Nhava Sheva. Meanwhile, HMS (80:20) offers from Europe were assessed as unchanged at $405/t CFR.

Pakistan: Pakistani buyers remained silent due to the significant gap between imported and domestic scrap prices. Additionally, sluggish sales in finished steel have negatively impacted market sentiment, leading to a temporary halt in production at several steel mills. On a weekly average basis, shredded scrap offers from Europe were assessed range-bound at $422/t CFR Qasim.

Bangladesh: In Bangladesh, the imported ferrous scrap market remained range-bound. Currently, new letters of credit (LC) openings and fulfilling regular procurement needs became easier due to a slight improvement in forex. Offers of US bulk HMS stand at $405-410/t, with H2 bulk from Japan at $400-404/t. HMS containers from Australia are priced at $412-415/t, with negotiations at $406-408/t. Shredded containers from the UK were offered at $422-425/t.

Japan: This week, Japan's H2 scrap export offers remained steady amidst muted demand from major importing markets. This stability was linked to the recent Kanto tender, which was awarded at JPY 52,590/t ($338/t) for 20,000 t of H2 scrap on a FAS basis. This price marked an increase of JPY 1,503/t ($10/t) from the April tender and the cargo was destined for Vietnam. Following this, Tokyo Steel, a leading steel mill, also raised its bids for domestic scrap by JPY 1,000/t ($6/t) at its Utsunomiya plant, resulting in higher domestic FAS collection rates.

However, the market did not absorb the increased prices, and buyers aimed to purchase at lower levels than those offered.

According to BigMint's latest assessment, Japanese H2 scrap export offers stood unchanged w-o-w at JPY 51,700/t ($332/t) FOB Tokyo Bay.

South Korea: South Korean mills showed less interest in seaborne scrap following another decline in domestic scrap prices. For example, Hyundai Steel's Pohang plant lowered its scrap purchase price by KRW 10,000/t ($7/t), effective 16 May, and is expected to shut down for approximately 20 days due to lower-than-expected demand.

Vietnam: Japanese H2 scrap export offers to Vietnam remained steady at $370/t CFR. Some traders reportedly offered higher prices, around $380-385/t CFR, following an uptick in the domestic market. However, no deals were concluded as buyers adopted a wait-and-see approach, anticipating a drop in offers due to sluggish domestic demand.

China: Shagang Steel had recently announced a reduction in purchasing prices of ferrous scrap across all grades, effective as of 16 May, 2024. The updated prices reflect a decrease of RMB 30/t ($4/t). Under the revised pricing structure, HMS (6-10 mm) stood at RMB 2,800/t ($388/t), including 13% VAT. Prior to this, the company implemented price increase of RMB 50/t ($7/t) on 8 May.