Global Ferrous Scrap Market Overview - Week 35, 2019

Global ferrous scrap market observed downtrend in almost all major markets this week. Turkey observed further fall in prices in this week's cargo bookings, while south Asian markets continued to follow the downtrend. Japan's Tokyo Steel, as well as China's Shagang Steel, lowered their scrap purchase price twice this week while South Korea's Hyundai steel booked Japanese cargo last week after a gap of few weeks.

Turkey - Price for imported scrap dropped sharply this week to 2 year low levels, amid low sales of finished steel in Turkey steelmakers resulting in demand for scrap restocking by steelmakers being less urgent. Few deep sea cargoes were booked at lowered prices, while indicative bids remained lower with Rebar prices too touching record low levels.

The deals included one US recycler sold a 42,000 MT of cargo to a Marmara-based mill, comprising of HMS 1&2 (80:20) at USD 270/mt and shredded at USD 275/MT CFR, while another UK based supplier sold a cargo with HMS 1&2 (80:20) at USD 270/MT.

Assessment of US-origin HMS 1&2 (80:20) scrap stands at USD 270-271/MT, CFR Turkey down USD 7/MT from last week. European origin HMS 1&2 (80:20) is assessed at around USD 265-266/MT, CFR Turkey.

Japan - Japan’s mini-mill Tokyo Steel twice lowered its domestic scrap purchase bids this week, on 28th Aug at its Okayama and Takamatsu works and on 30th Aug’19 at its Utsunomia plant by JPY 500/MT each respectively.

Following both the price cuts, the company is now paying JPY 26,000/MT (USD 245) for H2 scrap delivered to Utsunomiya plant while the price for H2’s delivery to its Tahara and Okayama works stand at 25,500/MT and JPY 23,500/MT respectively.

South Korea - Hyundai Steel has last week booked a bulk cargo vessel for Japanese scrap after a gap of several weeks. The bulk vessel comprising of around 50,000 MT was reportedly booked at JPY 27,000/MT FoB, the same price as its last price revision for Japanese H2 scrap in July’19.

Although the Japanese exporters had increased the price in July’19, Hyundai Steel resisted the hike and kept its bid unchanged throughout. Now with the recent decline in japanese domestic scrap prices, it is likely that the company will further cut its purchase price for Japanese scrap.

China - Following a price hike of RMB 50/MT last week, China’s Shagang Steel announced 2 successive price cuts for all grades of domestic ferrous scrap procurement by RMB 60/MT (USD 7) on 28th Aug and RMB 50/MT on 30th Aug’19 respectively, due to falling billet and steel prices.

Post 2nd price cut, Shagang steel is now paying RMB 2,590/MT (USD 362) inclusive of 13% VAT for HMS 3 (6-10 mm thickness) delivered to headquarter works situated in Zhangjiagang north of Shanghai in China. While HMS 1 (thickness not less than 20 mm) and HMS 2 (6-10 mm thickness) stands at RMB 2,670/MT and RMB 2,630/MT respectively.

India - Indian market for imported scrap continued to remain silent for the 4th week in a row, with only scarce deals of limited quantity being reported, even as offers continued to drop. Very low sales of finished steel due to floods and heavy monsoon has resulted in production cuts and maintenance for many furnaces and as a cascading effect steelmakers are not requiring any major restocking of inventories, while currency depreciation also remains a worrying concern.

Assessment for containerized Shredded from Europe, UK and USA stands at USD 290-295/MT, CFR Nhava Sheva, down USD 5/MT further against last week, however no major fresh trades witnessed, while some global suppliers withheld their offers amid uncertainty in prices.

HMS scrap saw very few deals being concluded as HMS 1 from Dubai being traded at around USD 270/MT CFR, while few HMS 1 offers from South Africa were heard at around USD 275/MT.

Pakistan - Imported scrap offers to Pakistan moved down all through the week, following the global downtrend, while trades slowed down this week on expectation of further correction by buyers, in addition to the strict custom regulation.

SteelMint’s assessment for containerized Shredded 211 scrap from US, Europe and UK stands at USD 291-293/MT, CFR Qasim, lowering by around USD 6-8/MT against last week’s report. Few deals were also at USD 295/MT were reported in the opening of the week but the prices dropped further as the week progressed.

HMS trades remained poor with the strict custom clearance regulations and additional import duty of 3%, while Dubai HMS offers were assessed at around USD 280/MT CFR. Domestic market remained slow on low demand and FBR’s strict enforcement of rules.

Bangladesh - As containerized scrap market remained uncertain with in terms of prices, few bulk cargo bookings were witnessed by prominent steelmakers n Chittagong as a total of around 62,000 MT of cargo was booked in 3 different vessels from USA and Japan-based suppliers. Offers for imported scrap inched down on globally weak sentiments.
SteelMint’s assessment for containerized Shredded scrap from UK, Europe and the USA stand in the range of USD 308-310/MT, CFR Chittagong dropping slightly against last week with some bookings being reported.

HMS scrap offers dropped further this week, this as well, with a deals of HMS1 from Brazil and Chile origin being concluded at around USD 297/MT CFR. South African and Australian HMS was assessed slightly higher at around USD 303-305/MT, CFR.

source: SteelMint