Weekly round-up: Mixed trends rule in global scrap prices; trade muted in key markets amid Eid

Global ferrous scrap prices showed a mixed trend this week. In South Asia, encompassing India, Pakistan, and Bangladesh, Indian buyers exhibited little interest in imported scrap due to weak finished steel sales, bid-offer disparities, and a shift towards more cost-effective materials like sponge iron.

Pakistani and Bangladeshi markets remained muted due to Eid celebrations. Turkish imported ferrous scrap prices from the US and Europe rose by $2/t, with post-holiday market activities expected to pick up as recyclers prepare for July shipments.

The European steel market continued its downtrend, with stable demand for existing stock but a lack of new orders, while Japanese scrap export offers saw a slight increase despite subdued interest from key importing markets. In Vietnam and South Korea, weak domestic steel sales and production cuts influenced market dynamics, with notable activity from POSCO in the seaborne market.

Turkiye: Turkish imported ferrous scrap prices from the US and Europe rose by $2/t w-o-w, with no market activities due to Eid-Al-Adha holidays. Post-holidays, recyclers expect renewed market activities and are preparing for July shipment cargoes. Market sources anticipate frequent bookings towards the end of the week and notable business in the fourth week of June 2024.

The European steel market is in a downtrend, with stable demand for existing stock but lacking new orders. Despite price hike attempts, hopes for a market pick-up after European elections and safeguard quota announcements have not materialized. European recyclers report limited scrap supply due to low collections and strong demand from Turkiye, supporting deep-sea scrap prices, with indicative prices for European-origin HMS (80:20) at $383-$384/t CFR Turkiye, potentially reaching $385/t.

US suppliers target $388-390/t CFR Turkiye for HMS (80:20), driven by increased freight costs. Rebar prices remain stagnant at around $578-580/t FOB Turkiye. The scrap-to-rebar spread narrowed to $192-194/t FOB.

India: During the week, India's demand for imported ferrous scrap declined significantly due to weak finished steel sales and bid-offer mismatches. Indian buyers showed little interest in imported scrap, anticipating further declines in steel prices and facing domestic market volatility. This hesitance was compounded by a shift towards more cost-effective raw materials, such as sponge iron, which offered a cheaper alternative. Despite offers for US and UK/European shredded scrap softening to $414-417/t CFR Nhava Sheva and HMS (80:20) from UK/Europe and West Africa at $390-395/t CFR, buyers remained disinterested.

Domestic HMS (80:20) scrap prices on a weekly average basis stood at INR 36,300/t DAP Mandi and INR 35,300/t DAP Jalna, marking a drop of INR 1,200-1,300/t w-o-w. Meanwhile, sponge iron prices fell by INR 1,600/t to INR 27,000/t compared to the previous week.

Notably, around 1,000 t of shredded scrap was booked from the US at around $414/t CFR, followed by 1,000 t of UK-origin HMS (80:20) at $388/t CFR, and 500 t of turning boring scraps were sealed at $360/t CFR.

Pakistan: Pakistani buyers remained muted during the week due to the observance of Eid, with market activities expected to fully resume on Monday as most buyers are still in a holiday mood. Earlier, buying interest was limited due to sluggish finished steel sales and tight cash flows.

On a weekly average basis, UK/Europe shredded scrap offers stood at $423/t CFR Qasim, slightly down by $1/t from $424/t in the previous week.

Additionally, a significant development this week saw Pakistan's NEPRA imposing fixed charges of PKR 200-1,000 per month on domestic consumers and PKR 1,500-2,000 per month on industrial consumers starting 1 July, further dampening market sentiments.

Bangladesh: Imported ferrous scrap offers to Bangladesh from the UK (shredded, HMS 80:20) decreased by $3/t w-o-w, with bulk scrap offers from Japan (H2) and the US (HMS 80:20) down by up to $5/t amid subdued market activities due to the Eid-Al-Adha holidays.

Rebar prices stood at BDT 88,500-89,000/t exw-Dhaka and BDT 95,000-95,300/t exw-Chattogram, shipbreaking scrap at BDT 61,500/t exy-Chattogram, and billet at BDT 75,000/t exw. Demand for imported scrap remained dull due to Eid festivities and LC opening challenges, with UK/Europe-origin shredded scrap offers at $423-430/t CFR Chattogram and HMS (80:20) at $400-405/t CFR. Post-Eid, inquiries are at prices $5-8/t lower than current levels due to weaker currency exchange.

Japan: Japanese H2 scrap export offers saw a slight increase of around JPY 300/t ($2/t) despite a lack of buying interest from key importing markets like South Korea, Taiwan, and Vietnam, with offer levels remaining unchanged.

This increase could be attributed to the recent price hike by Tokyo Steel, a leading Japanese EAF steel producer. Following Tokyo Steel's price hike, FAS collection prices in Tokyo Bay rose slightly to a range of JPY 49,500-50,500/t ($311-318/t) from the previous week's range of JPY 49,000-50,000/t ($308-315/t).

Notably, Tokyo Steel increased scrap procurement prices by JPY 1,500/t ($9/t), effective 18 June 2024. As a result, the new price of H2 scrap is JPY 51,000/t ($323/t) at the Tahara plant and JPY 50,000/t ($317/t) at the Nagoya plant. Prices at the Utsunomiya and Okayama plants remain unchanged at JPY 51,500/t ($326/t) and JPY 50,000/t ($317/t), respectively.

Consequently, BigMint's weekly Japanese H2 scrap export offers stood at JPY 49,800/t ($313/t) FOB Tokyo Bay, up from JPY 49,500/t ($311/t) FOB in the previous week.

Vietnam: Vietnamese mills displayed limited interest in imported scrap due to weak domestic steel sales, attributed to the onset of the rainy season causing delays in local construction projects. Offers for H2 scrap from Japan remained steady at $365-370/t CFR Vietnam. However, buyers' bid were around $360/t CFR levels.

South Korea: South Korean steel mills expect POSCO did not show any interest in seaborne scraps due to accumulating inventories amidst weak sales despite production cuts. However, POSCO was heard bidding for Japanese HS scrap at JPY 58,000/t ($365/t) and shredded scrap at JPY 57,500/t ($362/t).

This week, the ferrous scrap inventory rose for the first time in six weeks since early May 2024. This change happened due to a production cut trend spread across the industry. The combined ferrous scrap inventory of eight major South Korean manufacturers was approximately 790,000 t leading to an increase of about 24,000 t which is a 3.1% rise compared to the previous week.