Asian ferrous scrap buyers preferred domestic scrap as imported prices continued to rise amid tight supply, globally. A step-up in inquiries and buying from China is expected to increase prices further in the coming days.
South Korea
South Korean domestic ferrous scrap prices trended up this week with mills raising domestic bids amid shortage of containers, vessel delays and shortage of import scrap due to winter break.
The Davis Index for domestic Heavy A rose by KRW7,500/mt($6.9/mt) to KRW425,000/mt and KRW435,000/mt ($399.5/mt) delivered Incheon and Pohang, respectively.
Smaller mills refilled inventories with domestic scrap amid fears of a further rise in domestic and imported scrap prices in January due to resumption of ferrous scrap imports by China and firm Turkish prices. The weekly Davis Index for domestic Light A was flat at KRW410,000/mt delivered Pohang mill. Trades for the grade reported at the index price. Suppliers held material expecting a price hike amid rising global prices.
In containers, limited offers for HMS 1&2 (80:20) heard at $440-450/mt cfr from Europe, with no deals yet. Steel mills in Korea are cautiously buying containerised scrap and not keen on negotiating for bulk scrap due to high offer prices.
Taiwan
The Davis Index for containerized US-origin HMS 1&2 (80:20), Tuesday, settled flat at $435/mt cfr Taiwan from the prior day. Few offers heard at $440-450/mt cfr. Traders indicated that rising offers are becoming unviable. They further added that after holidays most yards have resumed with firm offers.
Feng Hsin Steel on Monday raised rebar and ferrous scrap prices by TWD400/mt($14/mt) ex-works and TWD300/mt delivered mill, respectively. After the revision, the steelmaker’s base price for rebar is TWD18,900-19,000/mt ex-southern mills.
The weekly Davis Indexes for domestic HMS 1&2 (80:20), Tuesday, rose by TWD300/mt to TWD11,450/mt ($409/mt) and TWD11,700/mt delivered South Taiwan and North Taiwan mills, respectively.
Vietnam
The weekly Davis Index for HMS 1&2 (80:20) increased by VND1,00,000/mt ($4.3/mt) this week to VND8,40,0000/mt ($362/mt) delivered South Vietnam inclusive of taxes, with deals heard around the index price. Vietnamese mills are cautiously negotiating for imported scrap amid a shortage of domestic scrap. Due to the continuous rise in offers, mills are adopting a wait-and-watch approach.
Mills have increased domestic scrap purchases, while yards are holding back on the expectation of a further rise in prices in January.
Few deals for HMS 1&2 (90:10) heard at VND8,50,0000/mt delivered South Vietnam on Tuesday.
China
In China, Shagang Steel raised ferrous scrap prices by CNY25/mt ($3.9/mt) on Tuesday from the prior week. Demand is firm as steelmakers in China resume ferrous scrap imports. Bulk deals were heard in the New Year for Japanese HS scrap amid on going negotiations. Raw material and semi-finished registered an uptick with iron ore prices rising to $166/mt on Monday, up by $6/mt from the prior week.
Scrap prices might rise further in January due to a rise in demand and a shortage of scrap in the domestic market. China will start importing ferrous scrap from Jan 1 and many mills are planning to book ferrous scrap shipments from the US, Australia and Japan, said traders.
The weekly Davis Index for the HMS 1&2 (80:20) rose by CNY25/mt to settle at CNY3,100/mt ($480/mt) delivered mill. Deals for P&S 5ft heard at CNY4,070-4080/mt this week.
On Tuesday, prices for Q235 150mm square billets in Tangshan rose by CNY70/mt to CNY3,810/mt ex-works including the 13pc VAT from the prior week. SE Asian billet exports offers remained at $600-620/mt cfr China this week.
Most mills and exporters are waiting for price direction in January before confirming any scrap deals, while domestic demand is firm as per market participants.
Thailand
The weekly Davis Index for domestic HMS 1&2 (80:20) rose THB800/mt ($26.7/mt) to THB11,300/mt ($377.4/mt) delivered Rayong mill inclusive of taxes amid firm buying by Thai mills. Deals for the grade heard at the index price.
Deals for P&S 5ft heard at THB12,500-13,000/mt. The imported scrap market remained bullish and a few buyers restocked scrap with material available at the port from Australia, Hong Kong or domestic yards. Traders said demand for scrap will remain firm and imported prices could rise further in January, which could lift domestic scrap prices. Higher freight charges and a shortage of containers have forced mills to procure domestic scrap.
Malaysia
The weekly indexes for HMS 1&2 (80:20) rose by MYR87/mt and MYR100 ($24.9/mt) to MYR1,475/mt ($367/mt), and MYR1,525/mt delivered western mills and eastern mills, respectively, inclusive of taxes on global cues. Mills have started raising bids this week and are preferring domestic scrap over high-priced imported scrap, said traders.
Rising iron ore prices and firm demand from China are expected to impact Malaysian mills, who trying to shift focus to domestic demand as vessel delays and container shortage are delaying imports.
($1=TWD28; CNY6.5; THB29.9; MYR4; VND23,187; KRW1,088)