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Ferrous market update: May 14-21

Ferrous Market Update 05/21/2021

 

Turkey

  • The daily Davis Index for Turkish imports of US-origin HMS 1&2 (80:20) increased by $2.81/mt on Friday amid firm offers and persisting demand.
  • Negotiations continued but no new deals were confirmed. The gap between bids and offers remains wide with mills bidding around $510/mt cfr for HMS 1&2 (80:20), while offers from the USA and the Baltic region are at $530-550/mt cfr and $520/mt cfr, respectively amid a dearth of suppliers, especially from the US.
  • Scrap purchases for June and July shipment are anticipated to continue in Turkey next week as mills have solid orders for steel products.
  • Spot rebar prices in the Turkish domestic market decreased by TRY40-50/mt on Friday amid a slowdown in trading. Icdas kept its prices unchanged at TRY7,420/mt ex-works Biga and TRY7,500/mt ex-works Istanbul. All domestic prices include 18pc VAT. ($1=TRY8.41) 

 

Turkey domestic

  • The weekly Davis Index for DKP scrap (equivalent to auto bundles) in Turkey increased by TRY188/mt delivered on Monday following higher prices for imported material and steel products.
  • Shipbreaking scrap in the Izmir region rose by $5/mt delivered on Monday. ($1=TRY8.28)

    CIS

  • The weekly Davis Index for HMS 1&2 (80:20) or A3 scrap rose by $17/mt in the Baltic Sea and by $26/mt in the Black Sea on Monday following recent deals.
  • Trading in the Russian export market revived as prices reached new highs, with a St Petersburg supplier selling HMS 1&2 (80:20) at $500/mt cfr and bonus material at $510/mt cfr to a Turkish mill last week. A recycler from Murmansk closed a deal with another Turkish mill at $510/mt cfr for HMS 1&2 (95:5). A new transaction was also fixed from Rostov-on-Don to Turkey at $495/mt cfr for HMS 1&2 (90:10) last week.
  • Collection prices for ferrous scrap increased in Russia in a firm export market with the weekly Davis Index for A3 scrap rising by RUB1,500/mt in St Petersburg dock and by RUB1,350/mt in Rostov-on-Don dock. ($1=RUB73.88). 

Europe

  • The weekly Davis Index for HMS 1&2 (75:25) in the ARAG region climbed by €1/mt on Tuesday after price growth decelerated due to unclear sales prospects. 
  • Collection prices varied significantly in the Netherlands (Amsterdam, Rotterdam) and Belgium (Antwerp, Ghent) as opinions on outlook differed after the Turkish market went quiet. 
  • Some exporters are wary of a downward correction amid negative sentiment from China, while others expect the uptrend to continue due to the firm Turkish rebar market. As a result, European dockside prices for HMS 1&2 (75:25) were reported in the range of €350-365/mt delivered. (€1=$1.22)

UK dockside

  • Davis Index’s weekly north and south UK HMS 1&2 (80:20) ferrous scrap indices increased by £10/mt ($14/mt) delivered dockside on Tuesday.
  • UK bulk ferrous scrap processors raised dockside purchase prices by £5-15/mt, depending on grade, this week to secure sufficient volumes to fill recently booked vessels, largely to Turkey. As a result, a large UK-based ferrous scrap exporter was heard to have paid at the top of this week’s range while rumoured to be still making approximately £60/mt gross margin.
  • Another British bulk processor who had booked considerably fewer deepsea cargoes was heard to be paying at least £10/mt lower by comparison.
  • Most UK bulk exporters have tempered the relative increase in dockside purchase prices to maintain a healthy margin despite parabolic price hikes in major seaborne trade routes.
  • That said, the longer seaborne prices remain this high (above $500/mt cfr Turkey) the higher the probability exporters will have to share more of the profit.
  • The weekly indices for north and south UK OA (Plate & Structural) climbed by £15-16/mt delivered dockside during the week and north and south UK 5A/5C (frag feed) ferrous scrap indices increased by £5/mt on the same basis. (£1=$1.41)

 

UK domestic

  • Davis Index’s monthly UK 1&2, 3B, and OA ferrous scrap consumer indices increased by £15-20/mt ($21-28/mt) delivered mill after most mill-yard negotiations concluded by mid-May.
  • This month’s transactions varied by grade, supplier, and settlement date with prices that settled anywhere between £5-25/mt up compared with the prior month.
  • Domestic merchants who settled earlier in the month with British smelters, failed to benefit from the full strength in export prices, given that they only recently transpired into much higher UK dockside purchase prices.
  • UK dockside HMS 1&2 (80:20) purchase prices nudged £5/mt higher from mid-April at the beginning of May, and then climbed by a more robust £20/mt by the middle of this month.
  • Premiums for new production ferrous scrap grades, particularly 4A/4C and 8A/8B, widened further this month in response to limited availability from relatively depressed vehicle production, in part caused by a global shortage of semiconductor chips.
  • As a result, Davis Index’s monthly UK 4A/4C and 8A/8B ferrous scrap consumer indices jumped by £52-57/mt delivered mill, following the conclusion of mill-yard negotiations in mid-May. (£1=$1.41)
     

Spain 

  • Davis Index’s northern Spain HMS 1&2 (80:20) and shredded small bulk weekly ferrous scrap indices increased by €15-17/mt ($18-21/mt) cfr, respectively, on Friday.
  • Spanish ferrous scrap import indices jumped again over the past week, though they still lagged overall pricing action on major seaborne trade routes, particularly to Turkey. 
  • The market unsuccessfully tried to lock domestic buyers into fresh sales, despite parabolic increases in the export market. Local suppliers were reluctant to commit to firm sales until seaborne benchmarks had plateaued and more clarity could unfurl.
  • A UK-origin Spanish-offered cargo of Bonus or Shredded was heard to have been bid and offered at around €380-395/mt fob this week.
  • Davis Index’s UK small bulk ferrous scrap HMS 1&2 (80:20) and shredded indices increased by €20/mt fob, respectively, during the week. (€1=$1.22)
  •  

Germany domestic

  • Davis Index’s monthly German ferrous consumer scrap indices rose by €20-35/mt ($3-8/mt), depending on grade and location, following the conclusion of May mill-yard negotiations.
  • German mills opened negotiations with bids unchanged compared with April settlements in early May, while suppliers targeted an increase of at least €5-10/mt. 
  • That said, a surge in major seaborne scrap prices prompted both domestic mills and suppliers to revise higher workable levels. 
  • Most mills subsequently raised bids by €30/t above April levels by mid-May, while suppliers met them with offers at prices at least €25/t higher compared with last month’s prices.
  • North German ferrous scrap indices increased by €23-27/mt delivered mill for Sorte 1 (E1), Sorte 2 (E2), Sorte 3 (E3), Sorte 4 (E40), Sorte 5 (E5), and Sorte 8 (S8). Prices in East Germany for these same grades climbed by €26-24/mt delivered mill and were up by €5-29/mt in South Germany and by €26-30/mt delivered in West Germany. (€1=$1.22)

 

US dockside

  • US East Coast and Houston dock collection prices for ferrous scrap remained on an upward trajectory for the third successive week amid export and domestic market price strength. 
  • Expansions on the East Coast have improved this week compared to limited movements earlier in May, as dockside sales are now more aligned with export sale price gains. Meanwhile, Houston dock increases are relatively modest following last week’s price surges.
  • Dockside sales for #1 HMS on the East Coast were generally between $365-400/gt on Tuesday based on dock location and base price from prior sales. The highest levels reported for the grade stood at $420/gt which may in turn, pull prices up at other docks. Also, dealers with ample tonnage are receiving higher prices while some docks are still fulfilling prior orders, also contributing to inconsistencies.
  • The Davis Index for US HMS 1&2 (80:20) exports to Turkey is up $2.50/mt since last week on slowing activity following strong demand due to the current disparity between offer and bid levels. However, it had risen by $84.35/mt on Tuesday from April 20.
  • In Boston, the weekly Davis Index for export yard #1 HMS increased by $11/gt and rose by $10/gt for P&S 5ft delivered Boston dock. Shredder feed was flat. Market participants noted that upticks to this dock have been delayed as bulk export sellers are filling older lower-priced orders.
  • The weekly Davis Index for export yard buying prices in New York moved up by $17/gt delivered for #1 HMS and P&S 5ft rose by $19/gt, while shredder feed soared by $27/gt. 
  • In Philadelphia, the Davis Index for export yard collection prices of #1 HMS jumped by $20/gt delivered, P&S 5ft moved up by $23/gt delivered Philadelphia dock and shredder feed jumped by $29/gt delivered. 
  • In Houston, the weekly Davis Index inched up by $3/gt for #1 HMS and shredder feed delivered, while P&S 5ft ticked up by $9/gt delivered Houston dock. The movements follow last week’s gains of $35-40/gt.
  • US West Coast dock prices ascended in San Francisco and Portland but were unchanged in Los Angeles on Tuesday. 
  • Firm offers for export scrap from Japan were present in the market amid higher prices for finished steel and scrap and tight ferrous scrap supplies. 
  • Domestic scrap prices throughout Asia continue trending up. Mills from South Korea, Taiwan, and Vietnam could engage in bulk buys in May. Emerging markets such as Thailand and Malaysia are also facing rising domestic scrap prices on tight supplies and higher import prices. 
  • Concerns over any correction in the Turkish market as well as difficult and unpredictable business dynamics in India continue to weigh on an otherwise optimistic outlook. Indian mills are vested on export orders and are facing COVID-19 infection concerns, though those numbers are dropping. 
  • Bangladeshi and Pakistani mills are slowly returning to a higher-priced scrap market but are expected to engage in additional transactions in May given the risk of still higher bulk and container prices through the summer. 
  • Strong Chinese activity is supporting global sentiment. Finished steel prices have firmed up and spot iron prices increased to $217/mt cfr on 62pc Fe support the higher scrap prices. 
  • The weekly Davis Indexes in Portland for export yard scrap rose by $6-9/gt for #1 HMS, P&S 5ft and shredder feed. 
  • Some Portland area dealers have been receiving higher prices for a few weeks while others limited flows to the docks pressuring for higher prices on the export trend. US domestic mills in the Pacific Northwest are expecting sharp increases in scrap buying prices with some market participants anticipating them up $40-50/gt on secondary grades against April settled prices. 
  • In Los Angeles, the indexes were flat this week for #1 HMS, P&S 5ft and shredder feed. Market participants are anticipating a dock increase soon as container export prices rose. 
  • In San Francisco, the Davis Index for #1 HMS and P&S 5ft climbed by $16/gt delivered. Shredder feed rose by $17/gt delivered.

 

US domestic

  • Market strength is expected to continue in the US ferrous scrap market next month with prices potentially rising across grades.
  • Ferrous scrap prices are noted to remain strong both in the domestic and export market. However, some concern remains on trade expectation should market corrections begin in late May or early June.
  • Turkish imported scrap deals moved the Davis Index for Turkish imports of US-origin HMS 1&2 (80:20) to $509.39/mt cfr on Wednesday, up by $60.99/mt from Apr 30 and by $27.18/mt against May 6. The buying influence from Turkish activity has fueled global scrap prices throughout the month. 
  • The pressure on bulk buys increased with tight global scrap inventories, limited availability of containers, higher freight, and increased demand from mills given the surge in economic activity in the domestic and export markets. US docks have increased scrap buying prices thereby competing with domestic mills for scrap inventories, especially, in coastal areas. 
  • US scrap demand, together with mill inventories, diverges in various regions as certain Midwestern areas have witnessed an overhang of secondary materials including #1 HMS, shredded, and P&S 5ft. This may be partially offset in Detroit during June trading as Gerdau Monroe will be looking for less material.
  • However, sources in nearby regions, such as just south of the Midwest, noted some large brokerage entities picked up any unsold tonnage from May, thus leaving secondary grades in limited supply throughout certain locations.
  • West of the Chicago region, SSAB is said to be short of scrap and is anticipated to have a larger buy program in June. This may provide a home for amply supplied secondary grades. Overall secondary material is expected to increase by $20-50/gt in June compared to May, with regional variance.
  • A few others see secondary grades rising more, regardless of supply, possibly up to $70/gt when accounting for finished steel prices, disparity in steel mills’ rising margins versus scrap price growth, export strength, and the recent pig iron import price surges.
  • For reference, the Davis Index for basic pig iron was $652/mt cfr New Orleans port on May 14, up $76/mt from $576/mt cfr Nola on Apr 16. Meanwhile, supply is tight and offer levels continue upwards, some as high as $720/mt cfr Nola. Next deals will offer more clarity, but prices are projected to remain strong.
  • Prime grades such as #1 busheling continue to be in tight supply amid the ongoing microchip shortage and are also slated for price increases although not as much in areas holding oversupplied secondaries. Prime grades are expected to rise by a minimum of $20-30/gt in June against May settled prices.
  • On the other hand, some market participants foresee strength in prime grades matching the strength in scrap alternatives such as pig iron. In that case, primes may be in place for much larger upward moves closer to $50/gt, especially if ensuing pig iron transactions take another large jump which sources are predicting.
  • The Southeast and Texas are forecasting strong increases on an export tug and continued strong finished steel prices. Additionally, given the substitution of shredded scrap due to limited prime grades, the demand is expected to support the price increase on the grade. Texas scrapyards are also expected to begin seeing scrap demand from the new flat-rolled SDI plant in Sinton near Corpus Christi. 
  • Hot rolled coil (HRC) spot prices continue trending up and are now at $1,675-1,708/mt ($1520-1,550/nt) from $1,542-1,609/mt ($1,400-1,460/nt) on May 3, up $133/mt from the bottom of the previous range and $99/mt from the top of the same range.

 

US containers

  • US containerized scrap prices leaped on the West Coast after buyers increased their activity fearing further prices hikes, slightly better container availability and stronger demand from domestic mills.
  • West Coast buyers increased the usual spread of $20-25/m between HMS 1&2 (80:20) and P&S 5ft and shredded to $30-40/mt because of their trades. Buyer resistance began creeping in at the end of Thursday, but this trend is being viewed as a temporary correction of around $5-7/mt since importers are expected to need more scrap to meet or increase the mills’ capacity utilization in their countries.
  • Japanese scrap offers declined by about $5/mt a few days ago which queued US-based sellers of potential lower bids by buyers. 
  • China’s warnings on steel price manipulation and enforcement of environmental rules with spot checks dampened prices in China and sellers relying on Chinese imports began to step back. Still, the overall market remained buoyant on strong Turkish export rebar prices and expectations of improved global economic activity through the summer. Sellers expect continued buying activity at strong prices.
  • Buyers note concerns over the uncertainty related to the COVID-19 pandemic as well as sustainable pricing to end consumers. One market participant noted that mills can adjust pricing to fit higher raw materials prices but end consumers also have margin concerns and bid pricing must match steel buying prices or projects could be delayed or renegotiated, which would extend timelines. 
  • Importers are also facing limited inventories and strong domestic scrap buying prices. Some note that domestic scrap prices may dampen over the next two weeks and become more attractive than the high imported levels. 
  • In New York, some buyers reported high buying prices compared to last week’s index, especially in buys made from Monday to Wednesday while others began negotiating at lower prices.
  • The weekly Davis Indexes in New York for #1 busheling rose by $3/mt fas while HMS 1&2 (80:20) dropped by $15/mt losing about one third of the climb last week. The index lags the latest transactions, but some are reporting negotiating HMS 1&2 (80:20) as low as $425-430/mt fas. P&S 5ft dropped by $3/mt fas while shredded fell by $2/mt fas. If the trend continues beyond a momentary correction, the indexes next week may display further declines. 
  • The weekly Los Angeles containerized scrap indexes for #1 busheling and P&S 5ft climbed by $17/mt fas, HMS 1&2 (80:20) rose by $14/mt fas and shredded grew by $19/mt. 
  • In San Francisco, the weekly indexes for #1 busheling, HMS 1&2 (80:20), P&S 5ft, and shredded climbed by $21/mt, $16/mt, $21/mt, and $24/mt fas, respectively. 
  • Seattle’s weekly Davis Indexes grew for #1 busheling by $23/mt fas for HMS 1&2 (80:20) by $17/mt, for P&S 5ft by $22/mt, and for shredded by $25/mt fas.

 

Mexico

  • Mexico’s domestic ferrous scrap price indexes mostly increased on Friday amid strong domestic demand, as Mexico is a net exporter, and limited inventories. 
  • Several market participants noted that they are exporting scrap, especially from the Northern region, on more attractive pricing instead of offering to regional mills. The Mexican market is increasing in tandem with the expectation of an increase of $30-50/gt in obsoletes such as #1 HMS, P&S 5ft, and shredded in the US market in June. 
  • Still, the #1 busheling index declined in all three regions despite reportedly strong demand across all grades in North, Bajío, and Central Mexico.
  • The US-origin HMS 1&2 (80:20) index increased by $61.19/mt cfr Turkey on Friday against May 3, which has also improved global ferrous scrap sentiment. The rise is supporting domestic markets on export demand and has facilitated substantial price increases through May. 
  • Mexican mills bid and purchase on a weekly basis. Mexican domestic steel prices have also increased to absorb the higher raw material price increases and consumer demand. 
  • Mexican mills have increased their offer levels to US importers on HRC and rebar which in turn also influences the domestic pricing and places pressure on mills’ capacity utilization while extending lead times.
  • In North Mexico, the weekly Davis Index for #1 HMS rose by MXN45 delivered, P&S 5ft increased by MXN40/mt, shredded climbed by MXN46/mt, machine shop turnings moved up by MXN42/mt delivered and #1 busheling fell by MXN93/mt delivered.
  • The weekly Davis Indexes in Bajío for #1 HMS, P&S 5ft, shredded, and machine shop turnings climbed by MXN38/mt, MXN12/mt, MXN88/mt, and MXN188/mt delivered, respectively, while #1 busheling declined by MXN212 delivered.
  • In Central Mexico, the weekly Davis Indexes all rose by MXN50/mt for #1 HMS, P&S 5ft, shredded, and machine shop turnings, respectively, while #1 busheling dropped by MXN37/mt. ($1=MXN19.95)

 

Japan  

  • Japanese electric arc steelmaker Tokyo steel hiked finished steel prices by JPY10,000-17,000/mt ($92-156/mt) or 9.5-17.6pc for June shipments, early this week. Tokyo steel raised asking rates to match global steel prices. Expectations of a stronger domestic demand also supported the price hike.
  • The mill raised ferrous scrap bids by JPY1,500/mt for all grades in Tahara and Kyushu whereas by JPY1,000/mt for all the grades in Okayama, Utsunomiya and Takamatsu. Revised bids for #2 HMS are JPY51,500/mt delivered Tahara works, JPY50,000/mt del Okayama, JYP50,000/mt del Kyushu, JPY48,000/mt del Utsunomiya, and JPY48,500/mt del Takamatsu.
  • The weekly index for #2 HMS, Wednesday, rose JPY2,000/mt to JPY52,000/mt ($478.66/mt) fob Japan. On a fas basis, the weekly index for the grade rose JPY2,500/mt ($23.01/mt) to JPY51,000/mt ($469.45).
  • The weekly index for P&S 5ft (small bulk) China port settled at $565/mt cfr, up by $35/mt due to a rise in offers.
  • The weekly indexes for Japanese small bulk HMS 1&2 (50:50) rose $10/mt to cfr Taiwan and Vietnam. The disparity between bids and expectations kept the market silent. ($1=JPY108.67)

 

South Korea  

  • The weekly Davis Indexes for domestic Heavy A, Tuesday, rose KRW5,000/mt ($4.43/mt) delivered Incheon, while it rose KRW2,500/mt delivered Pohang. The weekly Davis Index for domestic Light A grade delivered Pohang rose KRW5,000/mt.
  • Domestic scrap prices in the Pohang region rose KRW5,000/mt delivered. South Korean mills opted for domestic scrap over imported as offers kept rising. This week, mills continued to stay away from bulk purchases from Russia, Japan, and the US West Coast.
  • Profit margins are widening for EAF-based flat steelmakers as they are target above $1,030-$1,050/mt for HRC exports.
  • The weekly Davis Index for containerized HMS 1&2 (80:20), Wednesday, rose by $5/mt. Mills aim for $470-$480/mt cfr South Korea amid generous supply of domestic scrap.
  • The weekly Davis index for P&S 5ft, #1 HMS and shredded, Wednesday, jumped by $15/mt.
  • Offers for #2 HMS rose by JPY2,500 to JPY51,000 fas from the previous week.
  • South Korea’s Hyundai steel, Thursday, cut Japanese scrap prices by JPY1,000/mt ($9.2) for al26.03l grades in response to the drop in steel price in China. With the price revision, the steelmaker is also trying to tame seller sentiment, traders said.
  • Hyundai’s revised bids for #2 HMS at JPY49,000/mt fob, shredded at JPY53,000/mt fob, P&S at JPY 54,000/mt fob, and busheling at JPY55,000/mt fob. Last week, #2 HMS bids were at JYP50,000/mt fob Japan as announced on May 13. ($1=KRW1,119)

 

Taiwan  

  • The weekly Davis Indexes for domestic HMS 1&2 (80:20) rose by TWD600/mt ($21.5/mt) delivered Northern and Southern mill, respectively.
  • In seaborne markets, the daily Davis Index US-origin containerized HMS 1&2 (80:20) increased by $4/mt.
  • Taiwanese mills believe billet prices could rise in China’s domestic market. Offers for Southeast and East Asian billet at $750/mt cfr China on Tuesday. However, on Thursday, offers for Southeast Asian billets dropped to $670-690/mt cfr China as steel market sentiment soured after the Chinese premier warned steelmakers on unreasonably high prices.     
  • Feng Hsin, Monday, raised domestic scrap purchase prices by TWD600/mt while hiking rebar prices by TWD900/mt from the prior week to TWD20,900-TWD21,000/mt ex-works.
  • Authorities, Wednesday, imposed a Level 3 alert on the entire island amid a rise in the number of COVID-19 cases in major cities and counties. Demand continued to be under pressure in Taiwan, which could lead to a drop in prices. But if global scrap prices rally, buyers could have to shed their resistance and raise bids in the coming days, traders said.
  • The weekly Davis Index for containerized #1 HMS rose by $12/mt cfr Taiwan port whereas the index for shredded was up by $12/mt cfr Taiwan port.
  • The indexes for P&S 5ft rose by $12/mt cfr Taiwan while #1 bushelling rose by $10/mt cfr Taiwan port. ($1=TWD27.95)

 

China

  • The weekly Davis Index for the HMS (80:20) rose by CNY400/mt ($62.16/mt).
  • On Monday, Shagang steel cut ferrous scrap bids by CNY50/mt in line with a drop in domestic billet prices ex-Tangshan. The steelmaker had earlier raising bids for HMS scrap in the range of CNY4,100-4,300/mt delivered mill.
  • Spot iron ore prices for 62pc Fe, Monday, rose to $217/mt cfr China up $7.5/mt. On Tuesday, iron ore futures continued their uptrend rising another 5-7pc after a sharp drop last week. Futures for rebar and HRC, however, showed limited upward movement due to the government’s serious stance against high steel prices. Meanwhile, major Chinese mills continued to produce steel at a record pace boosting sentiments for the iron ore and ferrous scrap markets. 
  • Spot steel prices continued to drop on high inventories and a dip in steel futures on Monday. Billet prices, Tuesday, fell by another CNY70/mt to CNY5,470/mt ex-Tangshan including 13pc VAT.
  • Steel prices in China remained pressurized through the week as authorities try to rein in iron ore and steel prices which hit record highs and have the potential to slow the country’s economic growth. Chinese domestic billet offers, Tuesday, declined by CNY150/mt to CNY5,150/mt ($800.81/mt) from the prior day. ($1=CNY6.43)

 

Vietnam 

  • The weekly Davis Index for HMS 1&2 (80:20) in Vietnam rose by VND50,000/mt delivered Southern mill. After Baosteel revised HRC offers to above $1,000/mt ex-works, Vietnamese HRC and long steel producers including Hoa Phat and Formosa could raise prices in the coming days.
  • In the container market offers for FEUs of HMS 1&2 (80:20) remained in the range of $475-490/mt cfr Vietnam, up by $5-10/mt from the prior week.
  • Vietnamese mills limited their purchases this week after Vietnam Steel Association (VSA) urged local steelmakers to opt for domestic raw materials over high-priced imports to reduce costs amid rising global steel prices. 
  • The weekly Davis index for containerized #1 HMS, Thursday, rose by $12/mt cfr Vietnam. Shredded, P&S 5ft and #1 bushelling rose by $14/mt, $14/mt, and $12/mt, respectively. Offers for US-origin HMS 1&2 (80:20) rose by $12/mt from last Thursday. ($1=VND23,056)

 

Indonesia

  • The weekly index for P&S 5ft rose in the Indonesia port up by $7/mt amid weak supply. The Davis Index for shredded increased by $7/mt cfr Indonesia port.
  • Offers for P&S 5ft in the range of $520-$530/mt.
  • Indonesian mills have lost their competitive advantage in the billet export market after China waived off import duties on steel products from non-ASEAN countries.
  • Steelmakers are likely to stay away from imports and focus on the lower-priced domestic scrap to maintain margins in the coming days.

 

Thailand

  • The weekly Davis index for domestic HMS 1&2 (80:20) rose by THB75/mt delivered Rayong mill.
  • Thai mills focused on domestic scrap purchases amid increasing COVID-19 cases. The gap between domestic and imported scrap has widened with offers for HMS 1&2 (80:20) heard at $450-46/mt cfr Thailand, up $15-20/mt from the prior week. ($1=THB31.38)

 

Malaysia 

  • The weekly Davis Index for HMS 1&2 (80:20) rose MYR25/mt delivered eastern mill and up by MYR25/mt delivered western mill. Malaysian mills have decided to wait for clarity on the global trends.
  • Singapore is under lockdown for a month. ($1=MYR4.14)

 

India 

  • Indian imported Fe scrap buyers lowered bids sharply amid falling domestic steel and semi-finished prices. Steel exporters sentiments have dampened due to the Chinese government’s stance to control steel prices. Billet export offers on fob basis dropped by over $35-40/mt from the prior deals. 
  • The daily Davis Index for UAE-origin HMS 1&2 (80:20), Friday, cfr Nhava Sheva, was down $3/mt. On a weekly basis, the index dropped by $2/mt as interest on Friday lagged by $10-15/mt from present offers.
  • Secondary steel furnaces, despite easing oxygen supply have remained away from scrap purchases due to low demand for finished products. Many small-scale mills are on the verge of production shutdowns.
  • The Davis Index for containerized shredded, Friday, cfr Nhava Sheva, down $2.11/mt from Thursday, while down by $4.61/mt from the prior Friday. Bids for UK/EU origin shredded plunged below $510/mt cfr Nhava Sheva with most deciding to wait for more declines on weak steel demand.
  • The index for US-origin HMS 1&2 (80:20), Friday, cfr Nhava Sheva, down $2.5/mt as bids dropped amid weakened domestic fundamentals. Mills were only interested in loaded material with room for negotiation by $10-15/mt lower than securing it from yards.
  • For higher-grade scrap, there were nearly no buyers in the market. The indexes for P&S and #1 busheling dropped by $4/mt cfr Nhava Sheva from the last Friday. For West African HMS 20-21mt loading buying interest was around at $460-465/mt cfr Goa and Chennai. ($1=Rs73.1)

 

India domestic

  • Domestic ferrous scrap prices declined this week by Rs1,800-2,300/mt ($24.7/mt-$31.5/mt amid low demand from mills. Rebar sales plunged due to lockdown and disruptions caused by Cyclone Tauktae along the western coast.
  • The daily Davis Index for HMS 1&2 (80:20), Friday, declined Rs1,500/mt del Mumbai mills as compared to the previous week and index for HMS 1&2 (80:20) declined Rs2,300/mt del Mandi Gobindgarh.
  • Ferrous scrap prices are expected to remain under pressure amid slow to halted infrastructure activities in most parts of India. Construction work could resume by mid-June and boost demand for finished steel.
  • The daily Davis Index for billet in Mumbai fell by Rs1,800/mt ($24/mt) ex-works compared to previous Thursday following a drop in rebar prices. The index for rebar declined by Rs1,300/mt ($18/mt) ex-works due to subdue demand amid localised lockdown and harsh weather conditions.

 

Pakistan  

  • Pakistani ferrous scrap importers started resisting high offers on Friday and decided to hold purchases until there is clarity on price direction.
  • Limited domestic steel trades post-Eid and non-acceptance of the PKR5,000/mt hike in rebar prices by builders and end-users cooled sentiment in the second half of the week. 
  • The daily Davis Index for containerized shredded, Friday, cfr Port Qasim, down $3.32/mt from Thursday and down by $4.25/mt from the prior Friday.
  • A successive drop in Chinese steel prices over the week weighed on Asian steel prices, while domestic demand failed to encourage more restocking.
  • The daily Davis Index for UAE-origin HMS 1&2 (80:20), Friday, cfr Port Qasim, down $3/mt, but the index was up by $2/mt from last Friday. Offers for UAE-origin mixed #1 HMS and P&S dropped driven by lower prices in India.
  • The daily index for US-origin HMS 1&2 (80:20), Friday, cfr Port Qasim, down $2.32/mt. Offers were firm, driven by high global steel prices and buyers’ preference for short-transit scrap.
  • The Davis Indexes for P&S 5ft and #1 busheling on Friday cfr Port Qasim, respectively, down $5/mt from the prior Friday.
  • In the domestic market, steel trades remained sluggish even after the Eid holidays. High input costs reflected in an increase in asking rates, however, markets were not fully operational.
  • The weekly Davis Indexes for rebar rose PKR6,750/mt ex-works Karachi and up PKR4,250/mt ex-works Punjab.
  • The index for domestic Bala billet rose by PKR500/mt ex-works.
  • Domestic ferrous scrap supply remained tight. The weekly indexes for Art Q toke scrap (equivalent to a mix of HMS and P&S) and Pure Q toke scrap (equivalent to shredded) ex-yard Lahore, rose PKR500/mt each on Friday. ($1=PKR153.43)

 

Bangladesh

  • Steel mills in Bangladesh slowed the purchase of imported scrap in the latter part of the week after active trades early this week.
  • Some market participants expect domestic steel prices to come under pressure amid the impending arrival of monsoon and limited cash flow with small and medium-scale furnaces.
  • The daily Davis Index for containerized shredded, Friday, settled unchanged cfr Chattogram. Offers for containerized shredded from UK/EU-yards were firm with limited buying. The index rose by $3.75/mt from last Friday. Yards are interested in catering to bulk inquiries due to a shortage of empty containers.
  • The Davis Indexes for P&S and #1 busheling, Friday, cfr Chattogram rose $6/mt and $5/mt, respectively, from the prior Friday. Scrap generation and collection rates at supplier yards have taken a hit.
  • The daily index for HMS 1&2 (80:20) from Latin America settled cfr Chattogram, down $1/mt. Trades for the grade were reported at $503-505/mt cfr Chattogram.
  • The indexes for US-origin containerized HMS 1&2 (80:20) fell by $2.5/mt, UK-origin settled unchanged, and Australia-origin declined by $5/mt from May 14.
  • The weekly index for ship scrap equivalent to P&S settled ex-yards up by $1,000/mt on Friday. The weekly index for domestic HMS 1&2 (80:20) up BDT750/mt.
  • The weekly index for billet ex-works up BDT1,000/mt.
  • Rebar sales continued to disappoint large steelmakers who had to hike prices due to high input costs. After returning from the Eid holidays, large-scale steelmakers have hiked rebar prices by BDT1,500-2,000/mt ($18-24/mt).
  • The weekly index for rebar from large-scale mills up BDT2,000/mt ex-works. End-users in Bangladesh are unsure of booking at present price levels because the arrival of monsoon could pressure steel prices further. ($1=BDT84.84)

 

Metallics

 

US/CIS

  • The weekly Davis Index for basic pig iron (BPI) rose by $42/mt in the New Orleans port Friday on rising sales prices from Southern Brazil and increasing offer prices from CIS and Brazilian producers.
  • CIS and Northern Brazilian producers are firmly offering prompt BPI to the US at $700-730/mt cfr Nola at present, escalating from last week’s levels that ranged between $660-720/mt cfr Nola. Offer levels and transaction prices are anticipated to continue moving up over the next 30-60 days.
  • US buyers were confident that material could still be secured below offer levels and deals could be made at $680-690/mt cfr Nola, on Friday. The latest prices for BPI imports have surged by $115/mt in one month compared to the grade transacting around $579/mt cfr Nola on Apr 23.
  • The Davis Index for nodular pig iron (NPI) imports increased by $28/mt. Material availability remains limited. The latest offers for July or later shipment are in the range of $750-780/mt cfr Nola with bids lower. This compares to last week’s level at $710-750/mt cfr Nola.
  • US hot briquetted iron (HBI) imports increased by $5/mt. There are no recent bids or offers for the material, but the grade’s price movements account for the latest offer levels and how the grade compares in price with similar material which now stands at $450-500/mt cfr Nola.
  • The weekly Davis Index for CIS basic pig iron jumped by $51/mt fob Black Sea on Friday as exporters raised offers after the most recent transactions.
  • CIS suppliers remained bullish, with most of them offering pig iron at $660-680/mt fob Black Sea depending on destination. Sellers refer to firm global ferrous scrap and steel product markets. One exporter started to target $700/mt fob.
  • The weekly Davis Index for CIS pig iron in Italy rose by $43/mt on Friday amid sales to distributors. A Ukrainian producer closed one deal at $680/mt cfr for around 10,000mt of the material and a second deal at $685/mt cfr for around 5,000mt of the material.

 

India

  • The index for sponge declined by Rs1,500/mt del Mumbai mills this week and the index for Mandi Gobindgarh declined by Rs1,400/mt del mills. Steelmakers delayed raw materials purchases due to low demand from end-users. 

India semi-finished and finished steel

  • In Raipur, the daily index for billet drops by Rs2,000/mt ($27/mt) ex-works from the previous Thursday due to low buying from re-rolling mills. The index for rebar was significantly down by Rs3,000/mt ($41/mt) ex-works on extremely sluggish demand.
  • In Mandi Gobindgarh, the daily index up by Rs2,000/mt ex-works from the previous Thursday.
  • A deal 60,000mt (4Sp grade) billet by state-owned steelmaker RINL heard at $660-680/mt fob India. 

 

Shipbreaking 

  • Shipbreaking scrap prices declined by Rs1,000-1,500/mt ($13.7-$20.6/mt) this week as demand from the rolling mills was slow due to devastating Cyclone Tauktae. Yards were closed for two consecutive days and mills refrained from buying raw material.
  • The index for HMS attachments and Melting, Friday, declined by Rs1,300/mt ex-Alang from the prior week.
  • Demand from the construction and automobile sectors also remained low, the index for 1kg plates declined by Rs1,300/mt ex-Alang this week.
  • Re-rolling scrap prices also followed a similar trend and the index for 8Ani declined by Rs1500/mt ex-Alang.
  • This week, no major vessels were bought by Indian buyers as Pakistani and Bangladeshi yards were paying higher. ($1=Rs72.8)

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