Imported ferrous scrap offers in East Asian markets continued to be pressured by softening demand. Southeast Asian billets demand was subdued due to fluctuating Chinese prices. Post-mid-week, sentiments turned positive as Chinese iron ore and steel prices showed an uptick. The demand outlook has also turned optimistic, which could result in strong demand in the coming days.
Chinese steel prices showed stability on Thursday and boosted buyers’ confidence. Steel prices rose by CNY30-60/mt as trades resumed in the local market. Domestic billet rose by CNY30/mt to CNY5,000/mt ex-Tangshan inclusive of 13pc VAT. Prices for 62pc iron ore rose above $210/mt cfr North China. With Chinese iron ore prices rising by over 15pc in the last couple of days, East Asian steel buyers expect prices to rebound and show strength in the near terms.
South Korean steelmaker Hyundai steel, Thursday, presented revised bids for Japanese small bulk cargoes. It reduced bids Japanese scrap prices by JPY3,000/mt ($27.3) for all grades in response to a drop in steel prices and limited scrap demand in Japan. With the price revision, the steelmaker is also trying to tame seller sentiment, traders said.
Revised bids for #2 HMS are at JPY46,000/mt ($419/mt) fob Japan, H1:H2 at JPY46,500/mt fob, shredded at JPY50,000/mt fob, P&S (HS) at JPY51,000/mt fob and busheling (shindachi) at JPY52,000/mt fob Japan respectively. Previous bids for #2 HMS on May 21 were at JYP49,000/mt fob Japan.
In Japan, Tokyo Steel has kept its ferrous scrap purchase bids unchanged since May 18. The bids for #2 HMS are at JYP51,500/mt delivered Tahara works, JYP50,000/mt delivered Okayama, JPY50,000 delivered Kyushu, JPY48,000/mt delivered Utsunomiya, and JPY48,500/mt delivered Takamatsu.
Ferrous scrap deals remained slow in Taiwan but have picked pace compared to the last week amid a drop in prices. Domestic scrap and rebar prices fell mirroring the drop in Chinese prices last week.
The Davis Index for containerized #1 HMS Thursday dropped by $13/mt from the prior week to $450/mt cfr Taiwan whereas the index for shredded was down by $12/mt at $460/mt cfr Taiwan on Thursday.
The indexes for P&S 5ft and #1 bushelling fell $12/mt to $470/mt and $476/mt cfr Taiwan, respectively, on Thursday.
The Davis index for containerized #1 HMS, Thursday, dropped to $462/mt cfr Vietnam, down $12/mt from the prior Thursday. On a weekly basis, shredded, P&S 5ft and #1 bushelling indexes dropped to $472/mt, $481/mt, and $486/mt, respectively, down by $12/mt each. Offers for US-origin HMS 1&2 (80:20) dipped to $450-455/mt cfr Vietnam on weak demand since the past three weeks.
Steel prices are affected by the fall in billet and scrap prices amid wet weather. Mills are struggling to secure their margins and keep prices steady.
The Davis index for P&S 5ft showed a marginal uptick to settle at $510/mt cfr Jakarta Indonesian port, up by $2/mt from late last week on improved demand. Bids for P&S 5ft at $495-$500/mt.
The Davis Index for shredded, #1 busheling rose $2/mt on Thursday to $505/mt and $520/mt cfr Indonesia port, respectively, amid a rise in South Asian demand. Trades for HMS 1&2 (80:20) in containers heard at $490/mt cfr Indonesia. A few steelmakers were still focusing on lower-priced domestic scrap to maintain margins.
($1= JPY109.68, TWD27.68, VND23,032.7, IDR14,283.7)