Global Ferrous Scrap Market Overview - Week 25, 2019

Japanese scrap prices continued downtrend with another two price cuts made by Tokyo Steel. South Korean Hyundai Steel observed further lowering in Japanese scrap purchase bids. On the other hand, China's Shagang Steel hiked domestic scrap purchase price after one month on increasing scrap usage with the price ratio of scrap to iron ore hitting a new low.

Turkey - With increasing supply amid ongoing spring months and finish steel being offered at low price levels, global scrap prices fall continuously over the last few weeks, buyers remained less active this week cautiously observing the market trend.

A leading US origin supplier is reported to have sold HMS 1&2 (80:20) at USD 278.5/MT, Shredded at USD 283.5/MT, CFR and Bonus scrap at USD 288.5/MT, CFR while another cargo sold 11,500 MT HMS 1&2 (85:15) sold at USD 280/MT, CFR Turkey.

SteelMint’s assessment of US origin HMS 1&2 (80:20) scrap has lowered to USD 278-279/MT, CFR Turkey, down by USD 13-14/MT against the last weeks' report. Market is expecting the prices to have finally bottomed out now and a price recovery in the short term is being anticipated, while further slide in price seems unlikely.

Japan - Same as last week, Japan’s Tokyo Steel again lowered the domestic H2 scrap purchase twice this week by JPY 500/MT each time, with this, the recent cut marked as the 4th price lowering by the company in June’19.
After the 2nd lowering in bids this week, the company is paying JPY 28,000/MT (USD 261) for H2 scrap delivered at Tahara plant in central Japan and JPY 27,000/MT (USD 252) for Okayama plant. While for H2 scrap delivery to Utsunomiya plant, the new price has moved down to JPY 27,500/MT (USD 256).

Japan Steel Association's index of H2 scrap also fell by JPY 800/MT W-o-W, to an average at JPY 27,100/MT, amid no major indications of stability in prices in the coming days.

South Korea - South Korea’s Hyundai Steel again lowered the bids for Japanese scrap purchase by JPY 1,000/MT (USD 9) on 20th Jun’19 amid continued sliding in Japanese domestic scrap as well as downturn in South Korean domestic scrap prices. Company's current bids for H2 scrap stand at JPY 28,000/MT (USD 261), FoB Japan as against JPY 29,000/MT(USD 270), FoB presented last week.

Last week’s bulk booking negotiation for Russian scrap by the company concluded this week, at USD 295/MT for 50,000 MT (A3 grade) scrap, marginally lower than the previous booking.

China - Chinese EAF steelmaker Shagang Jiangsu Steel announced a price hike for purchase of domestic steel scrap (all grades) by RMB 50/MT (USD 7) effective from 18th June’19, against the previous price revision made on 15th May’19.

With the said price hike, Shagang Steel will pay RMB 2,630/MT (USD 380) inclusive of 13% VAT for HMS (6-10 mm thickness) delivered to headquarter works in Zhangjiagang north of Shanghai in China, up RMB 50/MT against the last report’s price of RMB 2,580/MT
With continuing high prices for imported iron ore and mismatch in supply-demand of scrap prices likely to remain supported.

South East Asia - Imported scrap offers for Vietnam and Indonesia continued to drop by another USD 5-10/MT in recent deals as market sentiments remain slow. US origin HMS 1&2 in bulk was being traded around USD 304-305/MT, CFR South Vietnam while Japanese Shindachi scrap offers stood at USD 330/MT, CFR Vietnam.

Indonesia also witnessed downtrend in prices with containerized shredded scrap in 20ft containers assessed at USD 305/MT, CFR Jakarta while P&S scrap (40 ft) from USA reported at USD 313/MT, CFR. Assesment for US origin HMS 1&2 (80:20) to Taiwan stands at USD 278/MT, CFR Taiwan.

India - Indian imported scrap prices dropped sharply this week amid continuously falling global prices along with severely weakened sentiments of domestic alternatives. Few deals of limited quantity were reported even as steelmakers continue to remain watchful.

Assessment for containerized Shredded from Europe, UK and US stood in the range USD 310-315/MT, CFR Nhava Sheva with limited deals being concluded in this range, while few prominent suppliers continued to offer at USD 315-320/MT CFR.

UK origin HMS scrap offers stood in the range of USD 295-300/MT, CFR Nhava Sheva, while offers for South African origin HMS 1&2 was reported at around USD 315/MT, CFR.  Local scrap sharply declined by INR 700-900/MT Wo-W amid weak overall domestic sentiments, as local HMS 1&2 (80:20) stands at INR 23,400-23,600/MT (USD 337-339), ex-Mumbai.

Pakistan - Post further devaluation in Pakistani Rupee to 157-158 against USD earlier this week, steelmakers raised the finished steel prices by PKR 7,000/MT (USD 45). Imported scrap offers to Pakistan witnessed downslide throughout the week, with deals being reported at USD 312-313/MT range by closing of the week, down against USD 315-318 levels during week opening.

Assessment for containerized Shredded 211 scrap from US and UK stands at USD 310-315/MT down by around USD 10/MT against last week. Dubai origin HMS 1 offers dropped below USD 320/MT, CFR while HMS 1 of UK origin reported below USD 310/MT, CFR Qasim. Finished steel prices in Southern region up sharply and being reported at around PKR 109,500-110,500/MT, ex-works inclusive of local taxes, while many steelmakers holding sales over more clarity on impact of Budget and currency depreciation.

Bangladesh - With new tax regulations announced in the recent national budget, Bangladesh’s finished steel prices rose sharply by BDT 2,500-3,000/MT (USD 32-36), while imported scrap offers followed the global downtrend, falling by around USD 8-10/MT on weekly basis.

Assessment for containerized Shredded scrap from the North America & Europe stands at USD 330/MT, CFR Chittagong, against USD 338-340 levels last week. Offers for South American HMS in containers currently reported in the range of USD 318/MT, CFR Chittagong while lower grade European HMS 1&2 at USD 310-312/MT CFR. P&S offers fell to USD 340/MT with low buying interest.