Global Ferrous Scrap Market Overview - Week 32, 2019

Turkey - Turkey steel mills end this week with single cargo traded after witnessing a total silence last week. A steel manufacturer brought an ex-US cargo comprising 20,000 MT of Shredded and 20,000 MT of HMS 1&2 (90:10) at an average price of USD 294/MT, CFR Turkey. Assessment of US-origin HMS 1&2 (80:20) scrap stand at USD 288-290/MT, CFR Turkey, while assessment of European origin HMS 1&2 (80:20) stands at USD 283-284/MT, CFR Turkey. There remains a disparity between buyers and sellers on the price direction after Eid-Al-Adha religious holidays activities.

China - After hitting a 1-year high, domestic scrap prices observed successive correction by total around RMB 110-120/MT this week amid escalating US-China trade disputes and Chinese yuan hitting a decade’s high of above 7 against USD. Shagang Jiangsu Steel group announced three price cuts each by RMB/MT 30, 30 and 50 for all grades of domestic steel scrap procurements amid falling in billet & rebar prices. It is paying RMB 2,700/MT (USD 382) inclusive of 13% VAT for HMS 3 (6-10 mm thickness) delivered to headquarter works situated in Zhangjiagang.

Japan - Mini mill Tokyo Steel dropped its domestic scrap purchase bids for 2 of its works by around JPY 500-1000/MT, after observing a marginal hike 2 weeks ago. The company is now paying JPY 25,000/MT (USD 249) and JPY 23,000 /MT for H2 scrap delivered to Okayama Plant and Takamatsu Steel Centre respectively, while the prices remain unchanged for the other 3 works. This price cut is more on adjusting for the recent currency appreciation against USD, as per the official sources, however, with the Korean steelmakers resisting the price rise amid current trade disputes and Obon festival holidays next week, the market might remain bearish in the immediate future.
-- ‘Kanto Tetsugen’- Japan’s monthly ferrous scrap export tender for Aug’19 concluded on 9th Aug’19, wherein a total of 25,000 MT of H2 scrap was awarded at an average of JPY 27,714 /MT (USD 261), FAS, as compared to JPY 28,060/MT in July 2019, witnessing a fall of JPY 346/MT on a monthly basis.

Taiwan - Domestic scrap & rebar prices remained unchanged for almost 1 month. Weak end-user demand put pressure on scrap buying as imported scrap offers moved in the range USD 278-280/MT, CFR Taiwan for US-origin HMS 1&2 80:20 marginally down by USD 3-5/MT 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).

India - Indian imported scrap prices plunge to almost 2 years low levels as overall market sentiments remained bearish. Importers have turned totally silent amid weakened scrap demand globally on Eid holidays while forestalling chances of a recession on its way with dwindling auto sales and weakened construction industry. Many traders look to clear high seas scrap cargoes as buyers stepped back from their orders amid successively fallen domestic steel prices amid ongoing monsoon production cuts and limited cash flow. Assessment for containerized Shredded from UK, Europe and USA stands at USD 300-310/MT, CFR Nhava Sheva, further down USD 5-10/MT against the last week. Offers of HMS 1 from Dubai remained limited in the range USD 275-285/MT, CFR Nhava Sheva while South African HMS 1 was being offered at around USD 290/MT, CFR. West African HMS scrap assessed at around USD 270-280/MT, CFR.

Pakistan - Domestic steel market remained silent on strict FBR enforcements and upcoming Eid holidays kept trades limited. Assessment for containerized Shredded 211 scrap from US, Europe and UK dropped to 2 years low and currently stands at USD 305-310/MT, CFR Qasim, with only minor deals being reported.
HMS scrap observed even fewer trades as stricter custom clearance norms for HMS increased the clearance cost, in addition to the 3% duty on HMS continuing. Dubai origin HMS 1&2 (80:20) is being offered at around USD 290/MT, while HMS 1 is assessed at around USD 295-298/MT, CFR. Domestic scrap prices moved down further to around PKR 65,000/MT (USD 406), ex-works.

Bangladesh - Offers for imported scrap continued to decline throughout the week, with minimal trades being observed on negligible demand in the market. Shredded scrap was traded in limited quantity at around USD 320-322/MT, however, by the closing of the week, the offers from suppliers in UK and Europe had dropped to USD 315-318/MT.
Few deals for HMS scrap was observed in the range of USD 305-310/MT depending on origin and quality, while limited offers for P&S from Brazil reported for USD 320/MT. 2 Japanese Bulk vessels arrived to berth this week while new inquiries for bulk cargos reported at around USD 325/MT for shredded. Domestic scrap continued downtrend on oversupply and now hovers below BDT 33,000/MT (USD 391) levels.