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Ferrous market update: July 27-31, 2020

Ferrous Market Update 07/31/2020

 

Turkey

  • The daily Davis Index for Turkish imports of US-origin HMS 1&2 (80:20) approached the $280/mt cfr mark on Thursday amid a flurry of deals.
  • Sellers achieved higher prices as demand for imported ferrous scrap was high as mills looked to close deals ahead of the Kurban Bayrami holiday. The most recent sales of HMS 1&2 (80:20) from the Baltic region were done at $277.50-279/mt cfr Turkey.
  • Some transactions were also fixed for short-sea cargoes in the Azov-Black Sea basin. Romanian HMS 1&2 (80:20), particularly, changed hands at $260-265/mt cfr Turkey recently.
  • The weekly Davis Indexes for DKP scrap and for HMS 1&2 [85:15] in Turkey were unchanged on Thursday.
  • Billet sales rebounded in the Turkish domestic market with some transactions fixed at $410/mt ex-works across the country early in the week. Deal prices reached $415-418/mt ex-works in Iskenderun on Wednesday-Thursday. Steel semis prices varied in the range of $405-410/mt ex-works a week ago.
  • Daily domestic rebar spot prices were unchanged at TRY3,550-3,600/mt ex-works, including 18pc VAT, on Thursday ahead of the holiday in Turkey. The rebar market was active during the week too. ($1 = TRY6.99)

 

Europe

  • The weekly Davis Index for HMS 1&2 (75:25) in the ARAG region held at €199/mt ($233/mt) delivered dockside on Tuesday.
  • Ferrous scrap exporters in the Netherlands and Belgium preferred to keep collection prices at previous levels, however, they have remained firm on their offers to Turkey, insisting on higher prices due to a significant euro revaluation against the US dollar. (€1 = $1.17)

 

CIS

  • The weekly Davis Index for HMS 1&2 (80:20) in Russia fob Baltic Sea increased by $8/mt on Monday and rose by $11/mt fob in the Black Sea region amid higher sales prices.
  • Business activity revived significantly in Russia’s ferrous scrap market last week after most exporters decided to sell to Turkey where demand and bids for scrap rose.
  • Collection prices for ferrous scrap moved up in Russia with the weekly Davis Index for HMS 1&2 (80:20) increasing by RUB200/mt ($3/mt) in St Petersburg dock on Monday and by RUB250/mt in Rostov-on-Don dock. ($1 = RUB71.79)

 

UK 

  • Davis Index’ weekly north and south UK HMS 1&2 (80:20) ferrous scrap indices delivered dockside were unchanged from the prior week, in the week of July 27.
  • Robust export demand for bulk and containerized ferrous scrap from buyers in Turkey, India, and Pakistan prompted most UK processors to lift dockside purchase prices to secure healthy inflows and fill booked vessels.
  • The recent strength in UK ferrous dock prices ran out of steam over the past week as benchmarks on major seaborne trade routes, particularly to Turkey, plateaued.
  • The weekly indices for north and south UK OA (Plate & Structural) and UK 5A/5C (frag feed) ferrous scrap delivered dockside, were also unchanged, over the same period. 
  • Davis Index’ UK small bulk ferrous scrap HMS 1&2 (80:20) and shredded indexes witnessed hikes of €2/mt this week amid robust demand. (£1 = $1.27) (€1 = $ 1.19)

 

Spain

  • Davis Index’ weekly northern Spain HMS 1&2 (80:20) and shredded small bulk ferrous scrap indexes edged higher by €2/mt ($2/mt) on Friday.
  • The bids, offers, and transactions were relatively slim over the same period with the main point of interest being that the transaction range had tightened to give a more accurate reading of where business was last done.
  • Looking forward, major seaborne benchmarks, particularly to Turkey, have shot up in the past 48 hours in response to new bookings and this recent development will no doubt reverberate into other regional ancillary markets in the short term. (€1 = $ 1.19)

 

US dockside

  • US East Coast ferrous scrap dock prices inched up amid consistent demand for imported scrap in Turkey.
  • In Boston, the weekly Davis Index for export yard HMS 1&2 (80:20) increased by $3/gt, P&S 5ft rose by $3/gt, while shredder feed moved up by $1/gt. 
  • The weekly Davis Index for export yard buying prices in New York increased for both HMS 1&2 (80:20) and P&S 5ft by $1/gt. On the other hand, the index for shredder feed dropped by the same amount.
  • In Philadelphia, the index for export yard collection prices of HMS 1&2 (80:20) and P&S 5ft both increased by $2/gt. The index for shredder feed declined by $1/gt. 
  • The weekly Davis Indexes in Houston remained unchanged with HMS 1&2 (80:20), P&S 5ft, and shredder feed holding at last week’s levels. 
  • US West Coast ferrous scrap dock prices trended flat to up during the week.
  • Higher ferrous scrap prices in the US export market are being supported by rising domestic scrap prices in many Asian countries including Japan.
  • Bulk offers from Russia rose this week after higher import scrap deals ex-US reached $275/mt cfr on shredded scrap, making HMS 1&2 (80:20) equivalent at $270/mt cfr Turkey.
  • The weekly Davis Indexes in Portland increased for HMS 1&2 (80:20) by $1/gt, while P&S 5ft rose by $2/gt. The index for shredder feed inched up by $1/gt. 
  • In Los Angeles, the weekly Davis Indexes increased slightly on a rise at the bottom of the previous buying range, but without a dock price announcement. The index for HMS 1&2 (80:20) and P&S 5ft both increased by $2/gt, while shredder feed prices inched up to recuperate last week’s index erosion of $1/gt.
  • The weekly Davis Indexes in San Francisco reversed course from last week with HMS 1&2 (80:20) increasing by $3/gt, P&S 5ft rising by $2/gt, and shredder feed going up by $1/gt.

 

US containers

  • US containerized ferrous scrap indexes increased on the West Coast for the third straight week. Containerized scrap on the East Coast rebounded by $8-13/mt this week, in contrast to a rangebound trend the prior week.
  • Higher import scrap prices to Turkey buoyed the global scrap market sentiment. Sellers report increased inquiries and an active export market in the US.  
  • Shredded and P&S 5ft containers are being quoted at comparable prices for the second consecutive week. 
  • The weekly Davis Index in New York for #1 busheling increased by $10/mt while HMS 1&2 (80:20) went up by $8/mt. The indexes for P&S 5ft and shredded rose by $13/mt each. The index for machine shop turnings, which tends to encounter wider changes depending on interest, only inched up by $1/mt.
  • Pakistan and Bangladesh slowed their inquiries towards the end of last week due to a holiday but could increase them again next week. The West Coast continued benefiting from active Asian buyers who wish to secure September deliveries.
  • Mills in Indonesia, Vietnam, Pakistan, and other Asian destinations believe that recovery will continue into Q3 2020 with the return of some infrastructure projects and resurrection of consumer demand supporting additional steel production. 
  • The increased scrap prices are supported by higher price movements in most domestic markets of buying mills as well as competing scrap from Australia, Russia, and the EU.
  • US containerized scrap prices are supported by Japanese scrap price movements, but some buyers are holding back in anticipation of a correction in the short term. 
  • Sellers believe that present scrap prices could remain through August with the US domestic scrap week early in the month trading soft sideways on obsolete scrap, domestic scrap prices at destination countries increasing, stronger Turkish scrap import activity absorbing inventories, and expectations for global steel sales improvements in September and October.
  • The weekly Davis Indexes in Los Angeles for HMS 1&2 (80:20) rose more robustly by $7/mt while P&S 5ft and shredded both increased by $4/mt. 
  • The indexes in San Francisco for HMS 1&2 (80:20) increased by $5/mt but remained mostly rangebound for other grades. 
  • The HMS 1&2 (80:20) index in Seattle increased by $1/mt while the other grades trended flat.

 

Mexico

  • Ferrous scrap prices increased in Central Mexico on better demand while scrap prices in North and Bajío continued to trend down for some grades.
  • Ferrous scrap prices in the Bajío region have decreased by around $200/mt over the past month, but market participants expect them to stabilize in August as demand improves.
  • In Northern Mexico, the weekly Davis Index for HMS 1&2 (80:20) and #1 busheling fell by MXN463/mt and MXN25/mt, respectively. The indices for P&S 5ft and shredded, on the other hand, increased by MXN109/mt and MXN378/mt, respectively.
  • The weekly Davis Index in Bajío declined by MXN100/mt for HMS 1&2 (80:20) and remained unchanged for shredded and P&S 5ft. The index for #1 busheling climbed by MXN150/mt.
  • In Central Mexico, the Davis Index for HMS 1&2 (80:20) increased by MXN50/mt and rose by MXN100/mt for P&S 5ft. The index for #1 busheling in the region dropped by MXN600/mt and held at last week’s levels for shredded. ($1= MXN22.23)

 

Japan  

  • Japanese ferrous scrap export prices were flat on limited trades, but yard offers remained high in line with global cues. Billet prices in Southeast Asia stayed high indicating room for an uptick in scrap prices. 
  • In the Kanto region, suppliers raised offers by another JPY250-500/mt this week. 
  • The Davis Index for #2 HMS fob Japan on Wednesday rose by JPY250/mt from the prior week. A few trades for #2 HMS with Taiwanese and Vietnamese mills were concluded this week. 
  • In small bulk cargoes, Japanese #1 busheling and HS scrap were offered at $10/mt higher with no buyers at those levels. 
  • In South Korea, SeAH and Posco steel held tenders for Japanese shindachi and shredded scrap purchases this week. Mills booked Japanese shredded and HS at JPY500/mt higher than the prior week. 
  • Japan’s domestic ferrous scrap prices moved up by JPY500/mt in the Kanto region.
  • On Monday, Tokyo Steel hiked scrap purchase prices by JPY500/mt ($5/mt) delivered Utsunomiya but held prices for the other four works in Japan. 
  • Japanese currency appreciated to JPY104.93 against a dollar from JPY106.9 a week earlier. ($1=JPY104.9)

 

South Korea  

  • South Korean mills booked limited volumes of containerized scrap this week. The weekly Davis Index for containerized HMS 1&2 (80:20) rose by $3/mt on global cues. The index for US-origin P&S 5ft rose by $5/mt amid thin trades. The index for containerized shredded rose by $4/mt.
  • In the bulk market, Hyundai Steel booked around 11,000mt of Russian A3 scrap cfr South Korea. Offers for Japanese #2 HMS rose by JPY1,000/mt from the prior week. Donkuk Steel’s bids for #2 HMS were JPY1,000-1500/mt lower than suppliers’ expectations. Other steelmakers, Posco and Seabe Steel are expected to place purchase tender for imported scrap before prices rise further. 
  • Global trends have lifted domestic scrap prices in South Korea. Mills raised their domestic scrap purchase prices by KRW5,000/mt ($4.17/mt) after four successive weekly cuts.
  • The Davis Index for domestic Heavy A remained unchanged. The weekly Davis Index for domestic Light A increased by KRW5,000/mt on Wednesday. ($1= KRW1,194.30)

 

Taiwan  

  • Scrap import prices rose on Thursday on the back of bullish offers supported by continuous buying by Turkish mills this week. Importers expect a further rise in offers amid increased buying by mills in South East Asia.
  • The Davis Index for containerized US-origin HMS 1&2 (80:20) rose by $5/mt from last Thursday and the index for containerized #1busheling and P&S 5ft increased by $9/mt on Thursday. 
  • Demand for finished steel continued to be under pressure but manufacturers are forecasting good demand in September. Taiwanese steelmakers’ base offers for rebar and billet increased by TWD200/mt this week. ($1=TWD 29.34)

 

China

  • In China, Shagang Steel reduced bids for domestic #2 HMS (6-10mm thickness) by CNY25/mt inclusive of 13pc VAT. The mill kept its rebar prices unchanged from a week ago. 
  • Prices for billets in the domestic market dropped by CNY20-30/mt on Tuesday. ($1=CNY7)

 

Vietnam 

  • In the containers market, the weekly index for HMS1&2 (80:20) rose by $4/mt. The index for #1 HMS increased by $8/mt on Thursday and rose by $7/mt for P&S 5ft.
  • Vietnam’s containerized market has been slow with no major deals heard this week amid limited domestic demand. Mills focused more on bulk scrap imports.
  • In bulk, Japanese-origin HMS 1&2(50:50) was offered at $10-15/mt higher than last week’s price, but no trades were heard at those levels.
  • Vietnamese HRC prices remained unchanged from last month as major steelmakers, including Hoa Phat and Formosa Steel, await an uptick in domestic demand. 

 

Indonesia

  • Amid a shortage of domestic scrap, Indonesian mills are bidding higher than buyers in other Asian countries like India. Bullish demand has made Indonesia a preferred destination for exporters of containerized ferrous scrap. 
  • The index for HMS 1&2 (80:20) rose by $11/mt cfr Jakarta. The index for shredded rose by $5/mt, while the indexes for #1 busheling rose by $12/mt and P&S by $17/mt cfr Jakarta. For the past two weeks, mills in Indonesia have preferred high-grade scrap due to a shortage of the grade in the domestic market.
  • Offers for US-origin rose by $10/mt and are expected to rise further on global cues. Eid-al-Adha holidays have reduced the pace of bookings in Indonesia, traders said.

 

Thailand

  • The weekly Davis Index for domestic HMS 1&2 (80:20) rose by THB200/mt delivered Rayong mill, inclusive of taxes. Steelmakers have started procuring scrap for August shipments expecting improved steel demand in September. ($1=THB30.60)

 

Malaysia 

  • Prices for domestic HMS 1&2 (80:20) in Malaysia rose amid a rise in imported scrap and iron ore prices. The indexes for the grade increased by MYR15/mt delivered western mills and rose by MYR20/mt delivered eastern mills, inclusive of taxes from the prior week.  ($1=MYR4.24)

 

India Imports

  • Indian mills resumed shredded trades this week as domestic steel prices and demand improved. Traders have started taking positions anticipating a domestic shortage of scrap in the coming weeks.
  • The Davis Index for containerized shredded cfr India subcontinent rose $9.31/mt from last Friday. Steelmakers in the South booked US-origin containerized shredded on cfr Mundra and cfr Vizag basis. 
  • The Davis Index for UAE-origin containerized HMS 1&2 (80:20) rose by $13.75/mt from the prior week. UAE suppliers stopped loading material amid Eid holidays, with trades expected to pick up later.
  • A few trades for Brazilian, UK, and Australian-origin HMS 1&2 (80:20) closed at $10-15/mt higher than a week earlier. 
  • In Goa, mills stayed away from imported scrap trades as finished steel sales remain sluggish. Chennai buyers booked West Africa-origin HMS 1&2 (80:20) at prices up by $10/mt from the prior week. 
  • Offers for busheling, turning and P&S grades too moved up by $10/mt on Friday. ($1=Rs74.81)

 

India domestic

  • Indian domestic HMS 1&2 (80:20) trended up early in the week and rose by Rs400-450/mt in the Mandi and Mumbai markets on Monday. However, scrap prices plateaued around mid-week. 
  • Prices in most markets barring Hyderabad, Indore, and Raipur declined on Thursday. In these three regions, HMS 1&2 (80:20) prices trended up and the bi-weekly indexes rose by Rs300/mt del Indore mill; Rs200/mt del Hyderabad mill and Rs450/mt del Raipur mill. 
  • The Mumbai market fell while the Mandi Gobindgarh market only gained back Thursday’s Rs100/mt decline on Friday.

 

Pakistan  

  • Imported ferrous scrap inquiries by traders remained high, but trades thinned amid Eid holidays. Post Eid, a surge in construction projects is expected to improve demand. 
  • The Davis Index for US-origin containerized shredded rose by $8.71/mt from the prior Friday. 
  • The Davis Index for HMS 1&2 (80:20) from UAE jumped by $18.25/mt from a week ago, before loading stopped for holidays.
  • The indexes for US and UK/EU-origin HMS 1&2 (80:20) rose by $9-10/mt from a week ago.
  • Domestic steel prices in Pakistan remained mixed. Pakistan currency appreciated by a dollar to PKR165.25 from a week ago. The resulting conversion gain lowered the value of imported scrap and allowed producers to offer steel at discounted rates. 
  • The weekly Davis Index for commercial Bala billet ex-works Punjab dropped by PKR750/mt from the prior week. 
  • The weekly Davis Index for G-60 rebar ex-works Karachi dropped by PKR1000/mt. Heavy rains in the Karachi region and a non-availability of laborers have lowered steel production in Pakistan. 
  • Domestic ferrous scrap prices in Pakistan increased in line with higher imported scrap offers. The weekly index for Art Pure Q equivalent to shredded rose by PKR250/mt ex-yards. ($1=PKR165.25)

 

Bangladesh

  • In Bangladesh, containerized ferrous scrap buyers adopted a wait-and-watch approach as offers reached a five-month high. Eid holidays have kept many traders away from the market. No major bulk deals were concluded this week. 
  • Domestic steel demand remained subdued challenged by heavy rains and flooding. Against this backdrop, present offer levels were unviable for most Dhaka-based mills.
  • The Davis Index for containerized shredded on Friday, increased by $2.50/mt from Thursday and by $11.25/mt from the prior week. 
  • The indexes for US, Australia, and Latin America-origin HMS 1&2 (80:20) rose by $8-13/mt from a week ago.
  • The weekly index for domestic billet remained unchanged ex-works Chattogram. 
  • Major steelmakers in Chattogram kept their rebar offers firm despite weak demand. Sales by large mills remain relatively better compared to those by small-scale steelmakers. 
  • The weekly Davis Index for rebar from medium and small steelmakers increased by BDT500/mt from the prior week. The Davis Indexes for HMS 1&2 (80:20) and shipbreaking scrap rose by BDT2,000/mt from the prior week. Jump in scrapped ship purchase prices by $15-20/ldt from the prior week, lifted domestic scrap prices. ($1=BDT83.95)

 

Metallics

 

CIS 

  • The weekly Davis Index for CIS basic pig iron was unchanged at $320/mt fob Black Sea on Friday as trading activity slowed down.
  • Deals were scarce in the global pig iron market and the only booking was heard in Turkey at $335-340/mt cfr Marmara for Russian-origin material. A few days before this transaction, Ukrainian pig iron was sold at around $330/mt to this country. 
  • Turkish mills were very active in scrap and pig iron purchases in the second half of July, ahead of the Kurban Bayrami holiday.
  • The weekly Davis Index for CIS pig iron in Italy rose by $3/mt to $338/mt cfr on Friday as some negotiations were reported in the Italian pig iron market with CIS suppliers raising their offers from $340/mt cfr to $345-348/mt cfr this week though bids varied in the range of $330-335/mt cfr. 

 

US

  • The weekly Davis Index for basic pig iron (BPI) ticked down by $1/mt cfr New Orleans on Thursday amid market silence and inactive sales. 
  • Producers offered material at $355-360/mt cfr Nola from the CIS and Brazil, however, US buyers view these offers as unviable because of reduced activity along with fewer costs required for freight. US buyers viewed BPI prices at $330-335/mt cfr Nola this week.
  • The Davis Index for nodular pig iron (NPI) imports declined by $2/mt cfr Nola as offers for the material are limited without new deals confirmed.
  • The weekly Davis Index for US hot briquetted iron (HBI) imports dropped by $27/mt cfr, Nola. The large disparity represents a recalculation to a more comparable price estimate for the grade, based on declines seen with similar material. However, no bookings were reported for HBI amid low demand and import activity.

 

India

  • In Mumbai, sponge iron prices rose by Rs400/mt del mill but fell by Rs200/mt del mill in Mandi Gobindgarh.
  • In Ludhiana, the bi-weekly index for sponge iron increased by Rs200/mt on Thursday amid pressures on finished steel demand because of rising scrap prices. 
  • The indexes for sponge iron in Indore and Hyderabad settled unchanged but fell by Rs450/mt del Raipur mill on Thursday.
  • The Chennai ferrous scrap market also mimicked global price trends and the bi-weekly index for sponge iron rose by Rs500/mt. 

 

Finished steel

  • The daily Davis Index for rebar in Mumbai on Friday remained flat from Thursday but rose by Rs200/mt ($2.67/mt) from last week. Steel mills in Mumbai continue to hold rebar offers despite moderate demand. 
  • The daily Davis Index for billets in Mumbai marginally fell by Rs50/mt (0.66/mt) from Thursday and declined by Rs 400/mt ($5.34/mt) from the previous Friday.
  • In Raipur, the daily index for billet fell by Rs250/mt ($3.34/mt) from Thursday and declined by Rs700/mt ($9.35/mt) from last Friday in sync with a fall in rebar prices. The daily Davis Index for rebar also dropped by Rs300/mt ($4.01/mt) from Thursday and decreased by Rs400/mt ($5.34/mt) from prior Friday.
  • In Mandi Gobindgarh, the daily index for ingot and rebar was flat from the previous Friday. 
  • In Chennai, the bi-weekly Index for rebar on Thursday rose by Rs292/mt ($3.90/mt) ex-works amid subdued demand. The index for billet rose by Rs125/mt ($1.67/mt) on the back of increased raw material prices. 
  • Sponge iron prices rose in line with an uptick in South African coal prices that raised mills’ input costs. Indian sponge iron makers import South African coal.

 

Shipbreaking 

  • Shipbreaking rolling prices this week rose by Rs200-300/mt as mills refilled raw materials inventory amid a tight supply of domestic ferrous scrap. The index for 4Ani rose by Rs200/mt ex-Alang on Friday as compared to July 27. The index for 8Ani rose by Rs150/mt in the same period.
  • Demand for plates remained firm this week, with the index for 5kg plates remaining unchanged on Friday and the index for 2kg plates declining by Rs50/mt compared to Monday.
  • The index for HMS attachments and Melting rose by Rs700/mt early in the week, but dropped by Rs500/mt from Monday, as mills stayed away from new bookings ahead of Eid festivities.
  • On the supply front, only HKC green units have been booked at Alang ports. Three vessels of 7,362ldt tonnage each were bought by cash buyers at $233/ldt.

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