Domestic ferrous scrap prices in most Asian markets were on downtrend as steelmakers struggled with weak finished steel demand. Prolonged inactivity and increasing supplies further pressured prices. Feng Hsin in Taiwan lowered scrap price, while Korean mills held back buying due to national holidays.
South Korean domestic ferrous scrap prices are flat this week and expected to have a downtrend despite limited supplies from exporters. Mills stayed away from any major buying due to low demand for finished steel in the domestic and the global market. Chuseok holidays are expected to halt trades through this week.
As expected, 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 woes 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, settled flat at KRW315,000/mt ($270/mt) and KRW305,000/mt delivered mills, respectively, with major steel mills like Hyundai, Dongkuk and others buying at index prices.
The weekly Davis Index for domestic Light A was flat at KRW280,000/mt delivered Pohang mill. Limited trades for the grade were reported at the index price as mills focused on buying special grades for high alloy making purposes.
In seaborne trades, a bulk deal for US-origin ferrous scrap was heard from USWC at $306/mt cfr with arrival in November. Confirmation for the same is still pending. Most South Korean mills stayed away from imported scrap bookings on the expectation of a further reduction in offers.
Rebar and ferrous scrap prices fell in Taiwan on Monday amid slow trading activities by $NT400/mt and $NT300/mt, respectively. Steelmaker Feng Hsin Steel anticipates further drop in the coming days. On the other hand, most mills lowered bids as yards come under pressure to sell this week. Feng Hsin’s base offers for rebar at NT$14,600/mt ex-works, respectively.
The weekly Davis Indexes for domestic HMS 1&2 (80:20) in South and North Taiwan was at NT$7,125/mt ($245/mt) and NT$7,300/mt delivered mill, respectively, on Tuesday, down $NT675/mt($23/mt) and NT$700/mt, respectively, from the prior week. Few deals for P&S 5ft were heard at $NT7600/mt.
In seaborne markets, US-origin containerized HMS 1&2 (80:20) offers dropped to $275/mt cfr Taiwan with no deals heard. Bids for the same grade were at $270/mt. The daily index for containerized US-origin HMS 1&2 (80:20) settled flat at $273/mt cfr Taiwan, from a day prior. Offers for HMS 1 &2 (90:10) were at $273/mt, while no deals heard. Market participants are expecting bids to lower to $265/mt due to national holidays starting this through next week. Bids for South American scrap were at $260/mt cfr Taiwan, down by $5/mt from a week ago.
The weekly Davis Index for HMS 1&2 (80:20) fell by VND1,62,500/mt ($7/mt) to VND6,437,500/mt ($278/mt) delivered South Vietnam, inclusive of taxes, with limited deals heard at index prices. Vietnamese mills remained cautious of bookings imported scrap expecting the prices to drop further in the coming days.
Mills were under pressure as low-priced HRC offers from China pulled down domestic sentiments. Most mills have high HRC inventory and have paused scrap buying for the week as they may slow production.
The auto sector is driving flat steel demand and imports, but domestic production is yet to reach 100pc capacity. With offers for US-origin ferrous scrap falling, Vietnamese buyers could wait for a further correction before buying scrap.
In the bulk market, Japanese #2 HMS offers were flat at $305-310/mt cfr Vietnam with no trades heard, while bids were at $300/mt. Vietnamese billet suppliers focused on exports with firm offers for October and November shipments. Offers for billets were at $445-455/mt cfr China against bids of $440/mt cfr China on Sep 29.
In China, Shagang Steel lowered domestic finished steel prices for October deliveries and lowered domestic scrap prices too. The weekly Davis Index for the grade settled at CNY2,650/mt ($388/mt) delivered mill down by CNY80/mt from prior Tuesday.
Prices for billets in the domestic market were at CNY3,320-3,330/mt ex-Tangshan mill on Tuesday, flat from a week earlier. Chinese mills increased HRC export offers as domestic demand slowed down. Domestic scrap prices in China are expected to remain on a downtrend in the coming days.
The weekly Davis Index for domestic HMS 1&2 (80:20) fell by THB300/mt ($5/mt) and settled at THB9,150/mt ($301/mt) delivered Rayong mill inclusive of taxes, with trades at THB9100-9200/mt. Sluggish finished steel demand this week led to limited ferrous scrap purchase by Thai mills, while traders sitting on high scrap inventory are looking for buyers.
Imported billet prices were flat at $440-450/mt cfr Thailand pulling imported scrap bids down this week. In seaborne markets, trades were limited due to the downtrend in ferrous prices globally.
The weekly indexes for HMS 1&2 (80:20) dropped by MYR75/mt and MYR40/mt to MYR925/mt ($223/mt) and MYR1,040/mt ($250/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 not pick up anytime soon with delays in new infrastructural and real estate projects.
Drop-in bids from Malaysian mills for imported scrap prices reduced trades. Most Hong Kong and South Korean suppliers expect Malaysian ferrous scrap consumption to increase in the coming days in absence of demand from Indonesia, where importers are staying away amid lack of clarity on new regulations, which come to effective Oct 1.
($1= JPY104.5; NT$29; CNY6.8; THB31.37; MYR4.1; VND23,185; KRW1,167)