Global Ferrous Scrap Market Overview - Week 31, 2019

Global ferrous scrap prices remained majorly rangebound on limited trades being reported. Turkey steelmakers remained totally silent, however, increasing domestic scrap prices in US and expected improvement in the Japanese scrap prices likely to pull spot scrap prices up in the coming days. Chinese scrap prices hit a record high with the recent hike announced for domestic scrap purchase by Shagang Steel.

Turkey - Imported scrap prices marginally come under pressure on no news of major trade this week. Increasing slowness in finished steel sales likely to push steelmakers to opt for production cuts in coming days. The standoff between recyclers and steelmakers extended further as yards feel current market levels are not profitable while mills postponed their remaining August & September shipments ahead of Eid holidays. Assessment of US-origin HMS 1&2 (80:20) scrap stand at USD 292-293/MT, CFR Turkey, while assessment of European origin HMS 1&2 (80:20) stands at USD 286-287/MT, CFR Turkey.

Japan - After witnessing a marginal hike last week, Tokyo Steel kept domestic scrap purchase prices unchanged this week, the company is paying JPY 26,500/MT (USD 249) for H2 scrap delivered to Utsunomiya plant. While Japanese scrap exporters rise their offers to southeast Asian buyers on improved demand. JPY appreciated by around 2% this week with 106.5 levels today against USD than 108.5 levels a week ago. Domestic scrap index of Japanese steel & iron association increased after almost 4 months to JPY 24,400/MT, ex-works, up JPY 100/MT this week. Participants are waiting for Kanto Tender's outcome next week.

South Korea - Hyundai Steel has held bids unchanged for Japanese scrap for more than a months’ time amid ample inventories and limited finished steel demand. No major deal was reported amid most of the steelmakers observing annual maintenance. The company had last revised its bid on 5th July which stood at JPY 27,000/MT (USD 253) FoB Japan. There were market rumors about increasing trade dispute between Korea and Japan on high dependency on scrap flow.

Taiwan - Domestic scrap & rebar prices remained unchanged for yet another week, Imported scrap offers stand in the range USD 283-285/MT, CFR Taiwan for US-origin HMS 1&2 80:20, marginally up against last week.
The leading steelmaker Feng Hsin steel kept its domestic scrap buying prices unchanged at TWD 9,000/MT (USD 290) for HMS 80:20 delivered to Taichung plant and Rebar prices at TWD 16,200/MT (USD 522).

Vietnam – Scrap importers remained away from buying actively however, Japanese scrap offers to Vietnam increase this week, HS scrap stands at USD 345/MT and Shindachi scrap at USD 335/MT in bulk vessels. US west coast origin bulk HMS 1&2 mix scrap offers heard stable at USD 315-320/MT, CFR Vietnam. While Japanese H2 bulk scrap offers inched up to USD 305-310/MT, CFR Vietnam.

China - Domestic scrap prices hit 1-year high amid supply tightness and stricter environmental norms. Shagang Jiangsu Steel group announced the price hike for all grades of domestic steel scrap procurement by RMB 20-50/MT (USD 3-7) effective from 30th July’19. It is paying RMB 2,810/MT (USD 407) inclusive of 13% VAT for HMS 3 (6-10 mm thickness) delivered to headquarter works situated in Zhangjiagang.

India - Domestic steel market condition remained very sluggish keeping imports of scrap less viable since a couple of months now, notably, HMS scrap offers to India are standing at 1 years' low however wide disparity between buying interest and offers continue to keep trades very limited in the market. Also, production cuts by steelmakers on monsoon impacted further. An assessment for containerized Shredded from UK, Europe and USA stands at USD 310-313/MT, CFR Nhava Sheva, marginally down against the last week. Offers of HMS 1 from Dubai have been dropped further sharply by USD 10-15/MT on W-o-W basis in the range USD 275-285/MT, CFR Nhava Sheva. South African HMS 1 was being offered at around USD 295-300/MT, CFR. Few deals of West African HMS scrap reported at around USD 270-280/MT, CFR. Arrival of a couple of bulk vessels filled scrap inventories in hand with West Coastal steelmakers further.

Pakistan - Imported scrap prices remained range bound this week as steel mills remained in ‘Wait and Watch’ mode amid heavy rains in Karachi and northern region and less clarity on new parametres of FBR for steel retailers & distributors. Few minor trades of Shredded scrap were reported in containers at USD 307-309/MT, CFR however with a recent jump in domestic prices in US/EU, traders continued offering in the range of USD 312-315/MT, CFR and recyclers at USD 318/MT, CFR. Dubai origin HMS 1 traded in the range USD 305-310/MT, CFR. Domestic scrap prices moved down around INR 1,000/MT to PKR 65,500/MT (USD 410), ex-works however, stricter restriction of invoicing and documentation keep buyers to prefer imported scrap.

Bangladesh - Market remained comparatively active in South Asian subcontinent however, heavy rains & upcoming Eid holidays keep prices under pressure. The market is keeping a positive outlook, for activities post-Eid holidays with expecting full-fledged sales of rebar towards early September. Assessment for containerized Shredded scrap from UK, Europe and USA stands at USD 320-325/MT CFR Chittagong, narrowing the range by USD 5 against last week. Containerized HMS prices plunge further with South American HMS 1 traded in containers at USD 309-313/MT while HMS 1&2 (80:20) from UK at around USD 300/MT CFR. Domestic scrap prices continued falling amid oversupply situation in the market.