Weekly round-up: Imported scrap prices fluctuate w-o-w; offers soften amid slow demand from Turkiye

Throughout the week, global ferrous scrap prices displayed a fluctuating pattern. Initially, at the onset of the week, Turkiye and India experienced elevated offers, primarily due to a resolute stance from sellers. However, as the week progressed, a gradual decline in prices occurred. This shift was attributed to subdued demand from downstream buyers, influenced by a considerable volume of cargoes already booked in Turkiye the previous week and the availability of alternative options for Indian mills.

In the context of the Pakistani market, there was limited interest from buyers for imported scrap, reflecting the sluggishness in the domestic steel sector. Bangladeshi buyers encountered challenges related to letters of credit (LC), but despite this, a few container deals were finalised. Notably, container prices were reportedly approximately $10/t lower compared to bulk deals, according to market sources.

Meanwhile, Japanese export offers experienced a continuous upward trajectory for the sixth consecutive week. This trend was driven by increased demand as Vietnam and Taiwan engaged in re-stocking activities ahead of the Lunar New Year holidays.

Turkiye: Turkish imported scrap prices face slight pressure amid reduced mill activity post last week's bookings, with no new deals confirmed. HMS (80:20) prices hovered at $425/t CFR for Baltic and US cargoes, and a subdued week is expected as many mills secured January cargoes. Slow scrap flow and weak appetite suggest minimal price movement, and uncertainty prevails about Turkish buyers supporting higher prices.

In Europe, domestic ferrous scrap prices rose in December, driven by the Turkish import scrap market surge. The scrap-to-rebar spread stands at $185-190/t, with rebar export offers around $610-615/t FOB. Turkish finished steel sales faced challenges at current levels, leading mills to likely maintain prices without further increases.

SteelMint's US-origin HMS (80:20) bulk scrap assessment is at $425/t, up $8/t w-o-w but softened from $430/t on Monday by $5/t.

The market may remain range-bound as well-stocked mills and recyclers show no urgency to sell, yet few buyer sources anticipate potential declines post-holidays.

India: In the Indian market this week, there was a notable disinterest among buyers to book imported scrap. This lack of enthusiasm can be attributed to the presence of cost-effective alternatives within the domestic market and the fact that buyers already possess substantial stocks that are expected to last until mid-January. Additionally, the arrival of previously booked materials, secured at lower prices compared to current levels, has further contributed to buyers adopting a cautious stance and refraining from active participation in new bookings.

A trader commented, stating, "The Indian market is relatively quiet, with buyers holding substantial inventory, leading to a limited number of inquiries. Additionally, there is a preference among buyers for materials that were booked earlier and are currently arriving."

Notably, only 250 t of shredded scraps were booked from the UK at around $410/t CFR west coast and around 1,200-1,300 t of HMS (80:20) were booked from the UK and West Africa at $394-415/t CFR. Additionally, 500 t of CR busheling scraps were booked from Germany at $440/t CFR and 1,000 t bonus scraps were sealed at $415/t CFR from the USA.

The average weekly offers for shredded scrap from Europe edged up by $8/t to $425/t CFR in comparison with $417/t CFR a week ago. HMS (80:20) offers also rose by $8/t w-o-w to $404/t CFR. Notably, offers have started falling since mid-week.

In November 2023, India's scrap imports totalled 1.12 mnt, marking a 13% increase compared to the 0.99 mnt recorded in October 2023, as per SteelMint data.

Pakistan: Throughout the week, limited buying was observed for imported scrap in Pakistan amidst subdued finished steel sales in the domestic market owing to year-end closing. Around 1,000-1,500 t of shredded scraps were booked from Europe and the Middle East at $425-435/t CFR Qasim, and around 500 t of sheared HMS were booked from the Middle East at $413/t CFR. Additionally, about 1,500 t of local scrap was sold at PKR 164,000/t ex-Karachi basis.

A trader said, "The purchasing activity for imported scrap is significantly sluggish due to the year-end closing and slow sales of finished steel in the market."

Bangladesh: In Bangladesh, imported ferrous scrap prices fluctuate and containerised scrap deals improved due to cost-effectiveness, but the domestic steel sector remains subdued ahead of the January elections. Shredded scrap from Europe was offered at $435-440/t CFR Chattogram, and HMS (80:20) at 420-426/t CFR. Moderate demand for imported scrap persisted amid LC opening difficulties and forex reserve declines.

However, a major steel mill secured an 8,000-t bulk cargo of HMS (80:20) scraps from Singapore at $430/t CFR, followed by 8500 t of Singapore-origin HMS (80:20) in bulk sold at $420/t on a CFR Chattogram basis and another cargo from Singapore comprising 8,500 t PNS in bulk sold at $440/t on a CFR Chattogram basis.

Last week, 11,000 t of sponge iron from India was booked at $380-385/t CPT Benapole.

In the domestic market, local ship-breaking scrap offers were heard between BDT 60,000-62,000/t, whereas PNS-grade scrap was heard at around BDT 63,000-68,000/t. Rolling mills offered rebar in the range of BDT 84,000-91,000/t exw Dhaka, while primary mills priced their products above BDT 95,000-99,000/t exw Chattogram. Billet offers were heard at around BDT 73,000-75,000/t exw.

Japan: Japan's H2 scrap export offers have increased for the sixth consecutive week, driven by tight supply in the domestic market and improved demand from major importing nations looking to replenish their stocks. As a result, SteelMint's weekly evaluation showed a rise of JPY 300/t ($2/t), reaching JPY 51,800/t ($366/t) FOB Tokyo Bay, compared to the previous week's JPY 51,500/t ($636/t) FOB.

The steel scrap market in the Nagoya region of Japan had observed a notable increase of JPY 500/t, with H2 prices ranging from JPY 35,500/t to JPY 36,500/t earlier this week.

Vietnam: Vietnamese buyers aimed to re-stock ahead of the Lunar New Year holidays and successfully secured a 5,000-t shipment of H2 scrap from Japan during the week, finalising the deal at $395/t CFR Vietnam. Additionally, buyers express satisfaction with the present price levels, highlighting improved margins between scrap and finished steel as a contributing factor to their comfort.

South Korea: South Korean mills showed a lack of interest in procuring H2 scraps from Japan, primarily due to the availability of more cost-effective materials in the domestic market. Despite this trend, POSCO submitted a bid of JPY 58,000/t CFR for Japanese high-grade scrap on 13 December, marking an increase of JPY 500/t. Bids for shredded scrap were at JPY 57,500/t CFR, reflecting a rise of JPY 1,000/t. Shipment completion is anticipated by 25 January 2024, with Gwangyang or Pohang as the designated landing ports.

The combined steel scrap inventory of eight South Korean steel firms totalled 979,000 t, down by 12,000 t or 1.21% from the previous week due to limited mill production.