Domestic ferrous scrap prices in most Asian markets were sluggish with very few deals reported this week.
Japan’s Tokyo steel announced a second successive price hike for domestic scrap purchase in September. The steelmaker raised the bids for all grades of domestic ferrous scrap as it resumed production post holidays on Monday. Tokyo Steel raised prices for all grades of ferrous scrap by JPY1,000/mt ($9/mt) delivered Tahara plant and JPY500/mt delivered Kyushu plant, effective Sep 15. Earlier on Sep 10, the company raised prices only for Tahara plant by JPY500/mt. The steelmaker had to hike prices following a rise in Japanese scrap export prices.
The purchase prices for #2 HMS will be at JPY27,000/mt ($255/mt) delivered Tahara works. New bids for busheling for deliveries to Tahara and Kyushu work are at JPY30,000/mt and JPY28,500/mt delivered works, respectively. Bids for #2 HMS and busheling are at JPY26,000/mt and JPY28,000/mt delivered Utsunomiya and JPY25,500/mt and JPY26,50/mt delivered Okayama mill, respectively.
In the Kanto region, #2 HMS was offered at JPY27,500-28,500/mt fas port. In the export market, #2 HMS traded last at JPY28,000-29,000/mt fob Japan and equivalent at $310-315/mt cfr Vietnam and HS and shindachi scrap in small bulk cargo was offered at $330-335/mt cfr Vietnam.
High raw material prices and recovering demand kept finished steel prices in the Southeast Asia firm. Japanese ferrous scrap prices remained bullish both in the domestic and export markets amid limited supply.
South Korean domestic ferrous scrap prices rose on Tuesday but market participants expect prices to go down by KRW10,000/mt as Hyundai and other mid-size mills bought limited quantities. Buyers have opted to wait before resuming imported scrap bookings as finished steel demand remains sluggish in Korea. Higher Kanto bids in September have also added to the vows of Korean importers, who have been buying lower-priced Russian cargo to reduced input costs.
The Davis Index for domestic Heavy A delivered Incheon and Pohang, Tuesday, rose by KRW6,700/mt and KRW7,500/mt ($6/mt) to settle at KRW332,500/mt ($282/mt) and KRW327,500, respectively, with deals heard at the index price.
The weekly Davis Index for domestic Light A was flat at KRW290,000/mt delivered Pohang mill. Limited trades for the grade were reported at the index price as mills focused on buying specific grades.
Rebar and billet prices rose in Taiwan after three weeks with Feng Hsin Steel raising prices by $NT500/mt($17/mt) to cover the rise in raw material cost. The steelmaker also raised scrap bids by $NT300/mt($10/mt) on Monday forced by a domestic shortage of scrap and rising imported scrap prices. Following Feng Hsin’s footsteps, other mills also raised prices. Feng Hsin’s base offers for rebar and billets were flat at NT$15,000/mt and NT$13,500/mt ex-works, respectively.
The weekly Davis Index for domestic HMS 1&2 (80:20) in South and North Taiwan was at NT$8,500/mt ($290/mt) and NT$8,700/mt delivered mill, respectively, on Tuesday.
In seaborne markets, US-origin containerized HMS 1&2 (80:20) offers rose to $280-285/mt cfr Taiwan with deals heard at $275-280/mt cfr this week. The daily index for containerized US-origin HMS 1&2 (80:20) settled flat at $279/mt cfr Taiwan. Market participants are expecting trades at $280-285/mt cfr this week amid high offers from Japan and US.
Bids for South American scrap were at $260-265/mt cfr. Importers are expecting Kanto bids to push prices further up this week.
The weekly Davis Index for HMS 1&2 (80:20) fell by VND30,000/mt ($1.3/mt) to VND6,820,000/mt ($293/mt) delivered South Vietnam, inclusive of taxes, with limited deals heard at index prices. Vietnamese mills remained cautious of bookings scrap for October shipment, due to high Japanese and US-origin scrap offers. Like Korea, Vietnamese market too was on a wait-and-watch mode as domestic demand is yet to pick up and production at many mills has not reached full capacity.
With rising auto production and increase in HRC imports, Vietnamese mid-size steel units are waiting for government to boost infrastructure and real estate sectors. Market participants are expecting Vietnamese finished steel demand to rise in October.
In the bulk market, Japanese #2 HMS offers rose by $5-10/mt to $310-315/mt cfr, with few trades heard at $310/mt cfr.
Vietnamese billet suppliers focused on exports with firm offers for October and November shipments. Offers for billets are at $440-445/mt cfr China against bids of $435/mt cfr China.
In China, Shagang Steel bought domestic #2 HMS (6-10mm thickness) at CNY2,830-2,850/mt ($417-420/mt) del Jiangsu mill, inclusive of 13pc VAT. The weekly Davis Index for the grade settled at CNY2,840, up by CNY10/mt delivered mill. Prices for billets in the domestic market were at CNY3,420/mt ex-Tangshan mill on Tuesday, down by CNY80/mt.
China has reduced import of billets this week due to high inventories and subdued demand for finished steel in the domestic market.
The weekly Davis Index for domestic HMS 1&2 (80:20) fell by THB200/mt ($6/mt) and settled at THB9,600/mt ($307/mt) delivered Rayong mill inclusive of taxes, with trades at the index price. Sluggish finished steel demand this week limited ferrous scrap purchase by Thai mills.
Market participants are waiting for the automotive and infrastructural sector to boost demand for steel which has been impacted the most by the pandemic. Most mills preferred domestic material over imports as overseas suppliers continued to raise offers.
In seaborne markets, limited deals for US-origin containerized HMS 1&2 (80:20) were heard at $270/mt cfr while offers were at $280-290/mt cfr Thailand. Offers for shredded were at $315-320/mt cfr, while Australian-origin HMS 1&2 (80:20) offers were at $290-295/mt.
The weekly indexes for HMS 1&2 (80:20) rose by MYR20/mt($4.8/mt) to MYR1,060/mt and MYR1120/mt($271/mt) delivered western mills and eastern mills including taxes, respectively. Limited trades were heard at the index price. Market participants are expecting demand for finished steel to pick up in mid-September and October when the government-funded infrastructure projects are expected to gain momentum. Malaysian mills are preferring domestic scrap and have limited imports due to rising ferrous scrap prices in the international market.
($1= JPY106; NT$29; CNY6.8; THB31; MYR4.1; VND23,210; KRW1,179)