Mills in South Korea, Taiwan and Vietnam lowered bids taking cues from their Turkish counterparts who lowered scrap purchase prices this week. No new bookings heard this week as market participants expect prices to fall further.
With the Turkish index for US-origin HMS 1&2 (80:20), Monday, falling to $432.25/mt cfr, down by $4/mt from Friday, traders expect Asian bids for imported scrap to fall.
Some market participants expect ferrous scrap prices to rise shortly given higher freight rates amid continued container shortage and vessel delays.
Exporters focused on fulfilling old orders scheduled to be shipped by the first week of March, rather than accepting new bookings at lower prices. There is a huge backlog of past orders due to the unavailability of empty boxes at exporter destination, especially in the USWC, said traders.
Japan
Tokyo steel lowered scrap purchase bids by JPY500/mt ($4.6/mt) for Takamatsu and Utsunomiya plant, effective March 17, amid sluggish domestic demand for steel and stiff competition from Chinese producers in the export markets. Bids for #2 HMS heard at JPY42,000/mt ($384/mt) delivered Tahara, JPY40,500/mt delivered Okayama, JPY41,000/mt delivered Kyushu, JPY41,500/mt delivered Utsunomiya and JPY39,500/mt delivered Takamatsu, on Tuesday.
Market participants expect prices to fall as South Korean, Vietnamese and Taiwanese mills could lower bids this week due to a drop in global scrap prices.
In the Kansai tender, on Tuesday, the winning bid was JPY3,026/mt lower than the winner at the Kanto tender on March 10. Nippon steel’s bought 5,000mt at JPY39,950/mt.
South Korea
Domestic scrap prices in South Korea trended down this week. Mills are expected to reduce bids further in the latter part of the week with a focus on domestic scrap purchases for immediate requirements.
The Davis Index for domestic Heavy A fell by KRW7,500/mt to KRW427,500/mt ($378/mt) and KRW445,000/mt delivered Incheon and Pohang, respectively. Mills have enough inventory for March and are cautious of new bookings, said traders.
The weekly Davis Index for domestic Light A was flat at KRW420,000/mt delivered Pohang mill. With the current fall in Japanese domestic scrap and lowered bids by Turkish and Chinese mills, mills are expected to remain cautious and closely watch purchase by other Asian countries.
Taiwan
The Davis Index for containerized US-origin HMS 1&2 (80:20), Tuesday, fell by $8 to $411/mt cfr Taiwan from Friday. Limited offers were at $415/mt cfr amid sluggish demand, while bids fell $5-10/mt to $405-410/mt cfr. Taiwanese buyers are cautious and closely watching falling Turkish and Chinese bids.
The weekly Davis Indexes for domestic HMS 1&2 (80:20) fell by TWD750/mt to TWD10,500/mt ($371/mt) and TWD10,750/mt delivered South Taiwan and North Taiwan mills, respectively. Feng Hsin reduced bids by TWD300/mt for ferrous scrap on Tuesday, while other mills kept bids even lower in anticipation of a fall amid weak global cues.
On Tuesday, few offers for HMS 1&2 (70:30) from Central America in FEU heard at $400-405/mt cfr down $5-10/mt from the prior week. Taiwanese importers indicated that domestic scrap is still cheaper than imports but supply remains tight.
Feng Hsin cut rebars offers by TWD300/mt to TWD18,800/mt ex-works on Tuesday.
Vietnam
The weekly Davis Index for domestic HMS 1&2 (80:20) fell by VND245,000/mt ($10.6/mt) to VND8,705,000/mt ($375.4/mt) delivered South Vietnam inclusive of taxes. Some traders expect bids to fall further on sluggish finished steel demand and improved imported scrap supplies.
A USWC bulk deal heard last week at $450/mt cfr while few indicated that the deal was at $445/mt cfr, with traders expecting a further drop in prices this week.
Most mills are negotiating for bulk over containerised due to a shortage of empty boxes in supplier destinations, but with bids falling from other countries, Vietnamese mills are yet to bid for Japanese scrap this week post Kansai tender. Vietnamese mills were cautiously watching Turkish buying prices and Chinese bids for Japanese scrap.
A few deals for busheling heard at VND9,600,000/mt delivered South Vietnam on Tuesday.
China
In China, Shagang Steel ferrous scrap purchase prices remained flat this week, while iron ore prices for 62pc Fe fell by $13/mt to $163/mt cfr Qingdao on Monday from the prior week. With iron ore prices falling by $5/mt on a single day amid pollution-related production curbs, market participants expect demand for ferrous scrap to remain firm. Chinese authorities are pushing for more EAF-based steelmaking in the country.
Mills could also focus on importing billets to fulfil domestic and international finished steel demand, said traders, who felt iron ore prices are still higher-than-expected and could fall in the coming weeks.
The weekly Davis Index for the HMS 1&2 (80:20) rose by CNY15/mt to CNY3,365/mt ($518/mt) delivered mill from the prior week. Deals heard at CNY3350-3380/mt this week. Steel prices are expected to be under pressure due to rising restrictions.
In Tangshan, Q235 150mm square billets rose by CNY10/mt at CNY4,430/mt ($681.7/mt) amid firm demand. Japanese HS scrap offers fell by $15-20/mt to $485/mt cfr, Tuesday, while bids fell to $480/mt cfr.
Thailand
The weekly Davis Index for domestic HMS 1&2 (80:20) fell by THB250/mt ($8/mt) to THB12,550/mt ($416/mt) delivered Rayong mill inclusive of taxes, amid deals at THB12,300-12,800/mt delivered mill. Mills reduced bids on bearish global cues and sluggish finished steel demand. Steel mills are expected to restock more scrap inventory this week and are cautiously tracking Turkish and Asian buyers’ purchase prices.
Deals for domestic P&S 5ft heard at THB13,000/mt on Tuesday, with mills preferring domestic scrap or imported billets. Container shortage and vessel delays added to the woes of steel mills who are more interested in short transit imports.
Billet offers at $580/mt fob India, with the expectation of a rise in demand from Asian countries amid rising iron ore and scrap prices.
Malaysia
The weekly indexes for HMS 1&2 (80:20) settled unchanged at MYR1,470/mt ($357/mt), and MYR1,500/mt delivered western mills and eastern mills inclusive of taxes, respectively. P&S 5ft deals heard at MYR1,840/mt delivered mill on Monday.
Malaysian steelmakers are cautious amid falling global scrap prices. Trades slowed with offers for US-origin HMS 1&2 (80:20) in FEU at $390-395/mt, down $5-10/mt from the prior week. Steel mills preferred domestic scrap as it remained competitively-priced against imports. Mills have ample inventory for March and are focusing on domestic scrap for any immediate demand, said traders.
($1=JPY109; TWD28.3; CNY6.5; THB30; MYR4; VND23,188; KRW1,130)