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Ferrous market update: September 14-18

Ferrous Market Update 09/18/2020

 

Turkey

  • The daily Davis Index for Turkish imports of US-origin HMS 1&2 (80:20) declined by $3.25/mt on Friday as mills, anticipating lower prices, refused to buy the material during the week.
  • Turkish mills suspended ferrous scrap bookings late last week and believe that prices for HMS 1&2 (80:20) from the USA and the Baltic region should decrease to around $295/mt cfr to spur any demand.
  • Most scrap suppliers also stepped back and withdrew offers this week in the hopes that Turkish mills will resume scrap purchases next week as they still require cargoes for October shipment. 
  • According to sellers, the workable level for US-origin HMS 1&2 (80:20) cannot go lower than $300/mt cfr.
  • Daily spot rebar prices in Turkey rose by TRY20-30/mt ($3-4/mt) ex-works, including 18pc VAT, on Friday amid currency fluctuations, while trading was sluggish.
  • The daily exported rebar prices remained unchanged with no significant deals reported. 
    ($1 = TRY7.57)

 

Turkey domestic

  • The weekly Davis Index for Turkish DKP scrap increased by TRY50/mt ($7/mt) on Monday and rose by TRY51/mt ($7/mt) for extra grade scrap.
  • Most Turkish mills switched to ferrous scrap purchases in the domestic market. As a result, they decided to raise purchase prices for the local material last week to spur its inflow as they tried to reduce scrap imports.

 

CIS

  • The weekly Davis Index for HMS 1&2 (80:20) or A3 scrap from Russia climbed by $1/mt fob Baltic Sea on Monday and inched up by $2/mt fob Black Sea.
  • Trading was active in the Russian export ferrous scrap market last week but slipped this week on lower demand from Turkey. Offers from Russia are scarce too as suppliers sold their cargoes or decided to withdraw offers and wait, hoping for prices to rebound to $305/mt cfr as soon as Turkish mills resume purchases.
  • No sales from Rostov-on-Don to Turkey were reported last week, but one exporter from this region traded a cargo of A3 scrap to Greece at $298/mt cfr. 
  • Collection prices rose in the Russian market with the weekly Davis Index for HMS 1&2 (80:20) increasing by RUB700/mt delivered in St Petersburg dock on Monday and by RUB400/mt delivered in Rostov-on-Don dock. ($1 = RUB75.23)

 

Europe

  • The weekly Davis Index for HMS 1&2 (75:25) in the ARAG region decreased by €5/mt ($6/mt) on Tuesday due to a lull in trading.
  • Some European suppliers chose to cut collection prices on significantly weak demand for imported ferrous scrap, especially in Turkey. Negotiations slowed down with buyers and suppliers preferring to wait and evaluate market conditions carefully before making a commitment. (€1 = $1.18)

 

UK dockside

  • Davis Index’s weekly north and south UK HMS 1&2 (80:20) ferrous scrap indices both remained unchanged on Tuesday.
  • Major seaborne benchmarks, particularly to Turkey, ran out of steam over the past week, with Davis Index’s HMS 1&2 (80:20) ferrous scrap import index peaking at $302/mt before easing off.
  • UK dockside scrap indices held steady over the past week with the range between the highest and lowest purchase prices tightening and solidifying around last week’s benchmark. 
  • Some British bulk exporters with vessels to fill were heard to have paid up to £185/mt for HMS 1&2 grades, while those buying on a more casual basis could secure the tonnes for £170/mt. 
  • One UK-based ferrous scrap processor commented that they were able to secure material at the low end of the range given that they were buying material from merchants without box-loading facilities.
  • The weekly indices for north and south UK OA (Plate & Structural) also remained unchanged over the same period on September 15.
  • Davis Index’s north and south UK 5A/5C (frag feed) ferrous scrap indices both remained unchanged over the past week. (£1 = $1.29)

 

Spain

  • Davis Index’s weekly northern Spain HMS 1&2 (80:20) and shredded small bulk ferrous scrap indices edged up €5/mt and €2/mt, respectively, on Friday.
  • Spanish ferrous scrap import prices consolidated around the upper ranges recorded the prior week, as little new business was conducted over the past week.
  • UK and European suppliers commented that the market had been eerily quiet this week, likely a result of extended annual vacations in southern Europe.
  • At the same time, the easing of major seaborne benchmarks, particularly to Turkey, has prompted market participants to wait on the side-lines until the next flurry of bookings reveals price direction.
  • Davis Index’s UK small bulk ferrous scrap HMS 1&2 (80:20) and shredded also remained unchanged over the week. (€1=$1.19)

 

Germany domestic

  • Davis Index’s monthly German ferrous consumer scrap indices increased on average by €15/mt, depending on grade and location, following the conclusion of mill-yard negotiations in September.
  • German ferrous scrap buyers entered negotiations in September with bids of €10/mt higher compared with transactions from the prior month. It soon became apparent that mills had to increase bids to secure volumes achieving higher prices in the export market.
  • Major seaborne benchmarks, particularly to Turkey, have increased $15/mt in the past month since German August settlements; with Davis Index’ HMS 1&2 (80:20) ferrous scrap import index peaking at $302.50/mt on September 10 before easing off thereafter.
  • As a result, north, east, and west German mills were prompted to pay up €18-20/mt compared with the prior month to secure sufficient volumes for their melting requirements and compete with relatively export prices.
  • South German-based mills witnessed more modest ferrous scrap prices hikes over the same period with competing buyers in Italy and Spain out of the market for extended annual leave, meaning domestic prices in this region only rose by €12/mt.
  • Domestic construction activity, the bastion of Germany’s economy this year, has petered out through July and August while stalling manufacturing activity has suddenly bounced back into expansionary growth territory over the same period.
  • North German ferrous scrap indices surged €17-19/mt. East German ferrous scrap indices jumped €15-20/mt. South German ferrous scrap indices climbed €7-12/mt. West German ferrous scrap indices increased €13-18/mt.

 

US dockside

  • US East Coast and Houston dock collection prices for ferrous scrap have risen incrementally since the end of August. Material flow remains condensed and export demand, while existent, has been restrained.
  • Collection prices along the East Coast gained about $2-8/gt while Houston dock prices were generally unchanged from September 8.
  • In Boston, the weekly Davis Index for export yard HMS 1&2 (80:20) rose by $6/gt delivered dock. P&S 5ft climbed by $5/gt delivered, while shredder feed was unchanged for the second straight week.
  • The weekly Davis Index for export yard buying prices in New York increased by $8/gt delivered for HMS 1&2 (80:20) by $7/gt delivered for P&S 5ft, and by $2/gt delivered for shredder feed. 
  • In Philadelphia, the Davis index for export yard collection prices of HMS 1&2 (80:20) climbed by $5/gt delivered, while P&S 5ft increased by $7/gt delivered. Shredder feed rose by $3/gt delivered.  
  • The weekly Davis Indexes in Houston were flat for HMS 1&2 (80:20) and P&S 5ft. The shredder feed index decreased by $2/gt delivered. Domestic scrap demand is healthy in Houston, with mills reporting strong flat-rolled steel sales and high capacity utilization rates.
  • US West Coast ferrous scrap dock prices in Portland decreased slightly while prices in Los Angeles continued flat and increased in San Francisco. 
  • The trend seems to follow the EU and UK collection prices that have leveled off or begun to decrease this week as the Turkish imported ferrous scrap market retreats. 
  • Asian buyers continue to remain interested in scrap exports from the US, reinforced by strong, competing Japanese export scrap prices that firmed up during the higher September Kanto trades. 
  • However, dock prices could trend flat in the US after adjustments in mid-September as markets show delayed import purchases by mills on concerns of weak domestic steel demand. 
  • The chances of dock prices retreating in the US market this month seem remote given the expectation of a strong sideways to $10-20/gt increase in domestic scrap prices in October compared to September settled prices. 
  • Pakistani and Bangladeshi scrap buyers have retreated or limited their ferrous scrap inventories due to continued rising prices. This week rumors circulated of a deal for bulk shredded by a Bangladeshi mill at $330-332/mt cfr off the US West Coast. If confirmed, the price would be $60-62/mt above late July deals to the region.
  • Indian mills have also lowered bids for imported scrap finding the present firm pricing from US scrap sellers untenable. Fewer inquiries and deals are being reported in the market. 
  • The weekly Davis Indexes in Portland decreased for HMS 1&2 (80:20) by $3/gt delivered and by $2/gt delivered for P&S 5ft. Shredder feed, however, increased by $7/gt delivered. Early in the month, regional mills increased buying prices by $20-25/gt, which caused Portland dock prices to jump accordingly. 
  • In San Francisco, the weekly indexes climbed with HMS 1&2 (80:20) and P&S 5ft increasing by $19/gt delivered and shredder feed rising by $5/gt delivered. Market participants report tight scrap feedstocks over the past week as fires raged in nearby areas that affected air quality for outdoor scrap processing, collection by peddlers, and even demolition project schedules. 
  • The weekly Davis Indexes in Los Angeles were mostly unchanged for the third consecutive week with HMS 1&2 (80:20) up by $1/gt delivered while P&S 5ft and shredder feed trended flat. 

 

US containers

  • US containerized ferrous scrap indices decreased in New York but rose on the West Coast. On the East Coast, cautious buyers who had accepted firm offers last week, retreated at higher prices, or established firm bids this week. On the West Coast, scrap deals softened prices on Thursday compared to earlier in the week. 
  • The weekly Davis Indexes in New York softened across most grades, with #1 busheling declining by $2/mt fas and HMS1&2 (80:20) slipping by $3/mt fas. The index for P&S 5ft decreased by $5/mt fas and shredded fell by $2/mt fas. The index for machine shop turnings was the only one that rose by $8/mt fas.
  • The Los Angeles Davis Indexes for containerized scrap surged with #1 busheling, HMS 1&2 (80:20), and shredded all increasing by $7/mt fas. The index for P&S 5ft rose by $9/mt fas. Deals were heard at $270-274/mt fas on HMS 1&2 (80:20) early in the week but by Thursday, cracks began to surface in these numbers depending on destination. 
  • The Davis Indexes in San Francisco increased for P&S 5ft by $6/mt fas and HMS 1&2 (80:20) by $8/mt fas with Seattle indexes for HMS 1&2 (80:20), P&S 5ft, and shredded rising by $7/mt fas.
  • Scrap inventory continues to remain tight on the West Coast. Sellers noted that Taiwanese buyers are pushing the market prices down while simultaneously seeking more volumes. A Taiwanese buyer continued seeking scrap this week to hedge against shipments from the US and South and Central America that were planned but may not materialize in the necessary timeline to meet production schedules. 
  • Taiwanese, Indian, and South Korean buyers remained concerned about rising scrap prices that may not be realized on finished steel sales in their domestic markets. 
  • Pakistani and Bangladeshi buyers delayed ferrous scrap purchases due to weak domestic steel demand, which is influencing finished steel sales at discounted prices. 
  • Softening prices in China’s domestic market and slowing imports by the country are also influencing lower billet prices in Asia along with other finished steel products that have been in demand recently. 
  • The higher September Kanto auction ferrous scrap prices along with increasing domestic scrap prices continue supporting higher Japanese scrap export prices, an alternative source to US-sourced scrap. Asian buyers continue exploring Russian, CIS, Central American, and other ferrous sources given the higher US and Japanese scrap prices.

 

Mexico

  • Domestic ferrous scrap prices in North Mexico increased for most grades due to higher demand from the automotive and construction industries. 
  • In Northern Mexico, the weekly Davis Index for HMS 1&2 (80:20) increased by MXN125/mt delivered Mexico consumer, while machine shop turnings rose by MXN492/mt delivered and #1 busheling moved up by MXN332/mt delivered. However, P&S 5ft decreased by MXN238/mt delivered, and shredded fell by MXN84/mt delivered.
  • The weekly Davis Index in Bajío for HMS 1&2 (80:20) fell by MXN100/mt delivered Mexico consumer, while P&S 5ft declined by MXN60/mt delivered. Machine shop turnings and #1 busheling remained unchanged. Shredded increased by MXN541/mt delivered.
  • In Central Mexico, the Davis Index remained unchanged for all grades except shredded, which rose by MXN240/mt delivered Mexico consumer. ($1=MXN21.11)

 

Japan  

  • Japan’s Tokyo Steel announced a second successive price hike for domestic scrap purchase in September. The steelmaker raised 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 September 15. On September 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. 
  • In September’s Kansai tender, bids for 5,000mt were up by JPY1,980/mt fas.
  • The weekly Davis Index for #2 HMS settled up by JPY250/mt fob, while the index settled flat for fas, with deals heard at index prices. The weekly index for #1 busheling (Shindachi) was up by JPY450/mt fob, with no deals heard. Deals for Japanese HS were heard at fas with the index rising JPY500/mt. 
  • Market participants said domestic demand for scrap in Japan far exceeds demand from export markets as many Asian buyers are holding back on purchases amid weak steel demand.
  • The index for HMS 1&2 (50:50) rose by $11/mt cfr Vietnam, with no trades heard. Bids for the grade were at $300/mt cfr Vietnam. HS and shindachi scrap in small bulk cargo was offered cfr Vietnam and a deal was heard. ($1=JPY106)

 

South Korea  

  • 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 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, rose by KRW6,700/mt and KRW7,500/mt ($6/mt), respectively, with deals heard at the index price. 
  • The weekly Davis Index for domestic Light A delivered Pohang mill settled flat. Limited trades for the grade were reported at the index price as mills focused on buying specific grades. 
  • The weekly Davis Index for containerized HMS 1&2 (80:20), Wednesday, rose by $13/mt to cfr South Korea. Import prices for other scrap grades also increased as suppliers raised offers. Mills could thus opt for lower-priced domestic scrap in the coming days. 
  • The weekly index for P&S 5ft, #1 HMS, and shredded rose by $16/mt, $15/mt, and $14/mt cfr South Korea, respectively. No deals were heard either in the containers or the bulk market this week. 
  • South American suppliers offered HMS 1&2 (80:20), up by $10/mt from the prior week. ($1=KRW1,179)

 

Taiwan  

  • The daily index for US-origin containerized HMS 1&2 (80:20) fell by $6/mt cfr Taiwan on Friday. Mills expect correction as buying has dipped amid sluggish demand for finished steel. Japanese export offers fell by $10/mt Friday and are expected to fall further. 
  • Taiwan-based traders indicated that only a few major mills are active at high scrap prices. Bids remain low. 
  • Finished steel prices in Taiwan were raised this week by $NT500/mt as mills like Feng Hsin passed on higher input costs to end-consumers. Steel mills preferred buying domestic scrap. 
  • The weekly Davis index for containerized P&S 5ft, shredded and #1HMS were up by $4/mt, $9/mt, and $8/mt, respectively cfr, due to rising offers. Few trades were heard for P&S 5ft during the week.
  • 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. ($1=$NT29)

 

China

  • The weekly Davis Index for imported billets rose by CNY10/mt delivered mill. Prices for billets in the domestic market were down by CNY80/mt.
  • China has reduced the import of billets this week due to high inventories and subdued demand for finished steel in the domestic market.
  • In seaborne markets, limited deals for US-origin containerized HMS 1&2 (80:20) were heard on cfr basis. ($1=CNY6.8)

 

Vietnam 

  • In the containers market, the weekly index for HMS1&2 (80:20) rose by $10/mt cfr Vietnam from the prior week, while up by $11/mt from September 3. No deals were heard in containerized grades as Vietnamese mills avoided buying imported scrap at high prices.
  • Steelmakers said an increase in auto production is driving imports of HRC into the country. Vietnamese mills could ramp up production to pre-COVID levels amid improved demand from the auto sector. 
  • The weekly index for #1 busheling, shredded, and P&S 5ft rose by $8/mt, $6/mt, and $10/mt, respectively, on a cfr basis due to rising offers. No deals were heard for the same.
  • Shortage of domestic scrap and an expected recovery in finished steel demand could drive scrap bookings in October, said mill owners. 
  • In the domestic market, the weekly Davis Index for HMS 1&2 (80:20) fell by VND30,000/mt ($1.3/mt) delivered South Vietnam, inclusive of taxes, with limited deals heard at index prices. 
  • In the bulk market, Japanese #2 HMS offers rose by $5-10/mt cfr. ($1=VND23,210)

 

Indonesia

  • Indonesian mills gradually increased buying but were cautious of the rising offers this week. The weekly Davis Index for HMS 1&2(80:20) rose by $6/mt cfr Jakarta as offers rose to $298/mt. No deals were heard at these prices.
  • Few deals for P&S 5ft were heard in TEU and in FEU with the weekly Davis Index up by $4/mt cfr on Thursday. #1 busheling and shredded rose by $4/mt, with no deals heard. 
  • Many traders and exporters are still unable to register with authorities to supply ferrous scrap into Indonesia. This is expected to create a shortage of scrap in the country. Buyers may avoid scrap imports after October 1. Market participants are expecting prices to soften amid weak demand from auto and infrastructural sectors. 
  • Many billet importers have reduced imports as they are yet to exhaust their raw material inventory. Indonesian mills focused on buying local scrap to avoid any shortage in the coming weeks.

 

Thailand

  • Mills delayed deals on expectations of prices softening in the next few days. Exporters from the US offered different grades of ferrous scrap to Thailand. Yards were able to sell 4,000mt of mixed grades in containers cfr Thailand on Friday, which as per traders was a stress sale.
  • The weekly Davis Index for domestic HMS 1&2 (80:20) fell by THB200/mt ($6/mt) and 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 infrastructure sector to boost steel demand. Most mills preferred domestic material over imports as overseas suppliers continued to raise offers. ($1=THB31)

 

Malaysia 

  • The weekly indexes for HMS 1&2 (80:20) rose by MYR20/mt ($4.8/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 reduced imports due to high ferrous scrap prices in the international market. ($1=MYR4.1)

 

India Imports

  • Weak export markets and slow construction steel demand pulled ferrous scrap bids down by $7-10/mt from the prior week despite short supply in India. 
  • Most mills preferred domestic scrap to control costs while the depreciation of the Indian Rupee and a shortage of oxygen forced many recycling yards and steelmakers to suspend some operations which further weakened buying sentiments.
  • The daily Davis Index for containerized shredded on Friday cfr Nhava Sheva dropped by $7/mt from the prior week. Trades for UK origin shredded reported around index price on Friday. The gap between offers and bids widened further.
  • The weekly Davis Index for UK/Europe-origin HMS 1&2 (80:20) cfr Nhava Sheva fell by $6/mt from the prior week. Few yards reported higher collection rates.   
  • The daily Davis Index for UAE-origin HMS 1&2 (80:20) cfr Nhava Sheva dropped by $8/mt from Thursday.
  • The index for US-origin HMS 1&2 (80:20) on Friday, cfr Nhava Sheva, was down $11.25/mt from last week. Though most US yards held offers high, Indian steelmakers were unwilling to pay higher.
  • In Goa, steel mills resumed trades for imported West African scrap with higher ferrous content. A few containers of TEU of West Africa-origin HMS 1&2 (80:20) traded down $5/mt from the prior week. Trades for HMS 1&2 (80:20) from Australia closed at lower prices while most Brazilian suppliers continued to target high prices.
  • Scrap inquiries for turnings increased this week amid production ramp-ups by secondary mills. 
  • The weekly indexes for higher grade scrap like busheling and P&S 5ft were down by $7/mt and $6/mt, respectively, from the prior week. Buyer interest in premium grades will return once the domestic market recovers, a trader said. ($1=Rs73.41)

 

India domestic

  • Prices of domestic ferrous scrap remained mixed on Friday as mills preferred to book material only to sustain production. The index for HMS 1&2 (80:20) rose by Rs200/mt ($2.72/mt) delivered Mandi Gobindgarh mill from Thursday but remained unchanged from the prior Friday. 
  • Supply of scrap in the domestic markets is scarce and mills have adopted a wait-and-see approach till demand from the end-users picks up. Imported HMS prices declined by $8/mt $296/my cfr India port in a single day as buyers reduced their offer and are not willing to pay above $300/mt.
  • The index for HMS 1&2 (80:20) declined by Rs100/mt del Mumbai mills from Thursday but remained flat from September 11. 
  • Markets in the South remained largely unchanged amid thin trades. 
  • Traders expect scrap prices to pick-up ahead of the festive season as the automobile sector—a major consumer of steel—has increased production to fulfill new orders.

 

Pakistan  

  • Pakistani ferrous scrap importers dropped bids by $5-10/mt as domestic steel demand continued to lag. The Davis Index for containerized shredded Friday cfr Port Qasim was down by $10.5/mt from the prior Friday. A few distressed sales from Europe and UK yards were reported at around index prices in thin quantities. The disparity between bids and offers resulted in limited trades.
  • The Davis Index for UAE-origin HMS 1&2 (80:20) Friday cfr Port Qasim dropped by $10/mt from the prior week. Buyers continued to prefer UAE-origin scrap due to shorter delivery times, a few importers held back trades to gain clarity on the extended ban on the export of scrap from the UAE. 
  • Supply tightness pushed containerized indexes up in the US domestic market. Yards refused lower bids from potential buyers. While a sharp drop in bids forced some UK yards to ease offers for cfr Port Qasim, but trades were limited on Friday. 
  • Pakistan’s National tariff commission (NTC) has proposed a reduction in tariff on imports of finished and semi-finished steel products, while large steel producers have opposed this move citing that it could result in the deindustrialization of the country. 
  • Improving demand from the auto industry resulted in Pakistani importers paying higher prices for HRC imports from China. Mills worried about low-priced Chinese steel flooding local markets in the coming days. 
  • Domestic steel trades were slow despite hopes of a recovery in demand from infra projects initiated by the government in the North. The weekly Davis Index for commercial Bala billet, Friday, was down PKR500/mt from the prior week, buyers cut purchase volumes due to liquidity crunch. 
  • The weekly Davis Index for G-60 rebar settled flat ex-works Karachi unchanged from the prior week. Finished steel prices in Southern Pakistan were under pressure as leading steelmakers offered discounts to liquidate inventories. 
  • Domestic Pure Q toke scrap (shredded) traded down by PKR250/mt from early this week. The weekly index for Pure Q Toke ex-Pakistan yard fell PKR292/mt from the prior week on Friday. ($1=PKR165.27)

 

Bangladesh

  • Bangladesh ferrous scrap market witnessed only containerized trades as major mills have refused bulk trades and are waiting for a price correction. Domestic demand remained subdued as most steelmakers are struggling with cash flow crunch. Transportation activities were disturbed due to heavy rains and floods in the outskirts of Dhaka.
  • The Davis Index for containerized shredded, Friday fell by $5.5/mt from the prior week. Several trades for containerized shredded scrap from Europe reported early in the week but subsequently dropped with rising supply from Australia and New Zealand.
  • Most infrastructure projects have resumed, and steel demand is expected to shoot in the coming weeks. Major mills have returned to 100pc utilization rates, which could see demand for ferrous scrap recover.
  • In the bulk market, mix HMS 1&2 (80:20) and shredded are offered at $325-330/mt cfr Chattogram pulling offers below $320/mt cfr Kandla on Friday. 
  • A sharp rise in bulk offers from Japan following the conclusion of Kanto tender led to a sudden rollback of buying interest from Bangladeshi buyers. 
  • The index for US-origin HMS 1&2 (80:20) cfr Chattogram, was down by $13/mt from prior Friday as importers were not able to pay more. Prolonged weakness in Bangladeshi demand could force suppliers to lower offers in the coming week. 
  • Only branded rebar suppliers were able to afford imported scrap. Almost 60pc of the steel mills in Dhaka are on the verge of shutting down as they are unable to sell rebar at a profit. The weekly index for domestic billet Friday settled unchanged ex-works Chattogram. 
  • Large steelmakers’ rebar prices rose to push the index up BDT318/mt ex-Chattogram from the prior week. Rebar by small-scale producers traded flat from the prior week.
  • Domestic shipbreaking scrap equivalent to P&S traded delivered mill on Friday rose BDT300/mt from the prior week. ($1=BDT84.41)

 

Metallics

 

CIS 

  • The weekly Davis Index for CIS basic pig iron increased by $11/mt on Friday on new sales to the USA and the Middle East.
  • Demand from the US for pig iron supported further prices increase in the CIS export market after a Ukrainian and a Russian producer each sold 50,000-55,000mt of the material at $387-388/mt cfr to the USA for October-November shipment. Previous deals were closed at around $360/mt cfr at the end of August. US importers accepted higher prices for pig iron amid rising local ferrous scrap prices and a revival of steel product sales.
  • Demand for pig iron was also noticed in the Middle East with a Ukrainian producer selling about 30,000mt of the material at $404/mt cfr to the UAE.
  • The weekly Davis Index for CIS pig iron in Italy increased by $4/mt cfr on Friday as exporters raised offers, considering deals at alternative outlets. CIS pig iron sellers began targeting $380-385/mt cfr, though buying activity was low in Italy and negotiations were sporadic.
  • The Chinese imported pig iron market was quiet this week. A sale for Russian-origin material at $394.50/mt cfr was reported, but it was done around a week ago and did not reflect the market reality.

 

US

  • The weekly Davis Index for basic pig iron (BPI) increased by $25/mt cfr Nola on Thursday on the conclusion of new deals and US buyers heeding higher prices.
  • A few cargoes of BPI originating from the CIS were sold at prices in the range of $385-390/mt cfr Nola. Previous BPI sales were around $360/mt cfr Nola on August 28, with offer prices subsequently climbing incrementally.
  • Material was offered to more US buyers on Thursday for $390/mt cfr Nola for November and December shipments. Additional deals are expected within the next week.
  • The latest confirmed prices for BPI sold into China from the CIS are around $393/mt cfr, while Brazilian BPI sold to China has been reported as high as $400/mt cfr. These prices are considerably higher than the CIS-origin BPI sold to China for $370-380/mt cfr a week ago.
  • The Davis Index for nodular pig iron (NPI) imports increased by $25/mt cfr Nola because supply is constricted, and Brazilian sellers revised their focus to BPI production to meet rising demand. The newest offers for NPI were for around $405-410/mt fob Brazil, which parallels $430-435/mt cfr Nola; however, US buyers reckon the price is closer to $400/mt cfr Nola. 
  • The weekly Davis Index for US hot briquetted iron (HBI) imports increased by $9/mt cfr Nola. There have been no recent offers or bids reported for HBI, as demand has been low, but the grade is likely valued near this level, based on price trends for comparable materials.

 

US finished steel and scrap

  • Mills have been raising prices on various steel products since late-August. On September 11, Davis Index reported price increase announcements on plate and hot-rolled coil (HRC). Steelmakers also announced the second round of increases on flat-rolled, pipe, and tube last week after an initial announcement in August. A first price increase on rebar was announced in early September. 
  • Recently, US Steel and USS-POSCO raised spot prices for HRC, cold-rolled coil (CRC), and flat galvanized steel by $60/nt, while other producers increased prices by $50/nt due to supply tightness, extended lead times, higher demand, and higher input costs, especially, for ferrous scrap. 
  • HRC prices increased by 12pc to $606-639/mt fob mill this week. Market participants expect September’s demand and prices to remain strong.
  • Inventory restocking was the main driving force for increased demand this month as service centers had delayed new orders pending more clarity on COVID-19 trends. As a result, centers placed orders in late August and continued into September. Inventory levels are expected to return to desired balances within six weeks, limiting the expectation of an additional surge in orders in November.
  • However, the flats market remains concerned over excess supply due to BOF restarts and the lack of strong steel demand in some sheet consuming sectors, which could result in price retreats in late October or November.
  • Nucor, SDI, and CMC were among the mills that announced rebar price increases of $40/nt over the past two weeks. Rebar prices currently stand at $650-661/mt fob mill, up by $55/mt from the bottom of the previous range and by $33/mt from the top of the same range against $595-628/mt in late August. 
  • Market participants are keeping an eye on the risk of another lockdown should a second COVID-19 wave surface in the traditional flu season. Additionally, the US election on November 4, natural disasters such as hurricanes and wildfires are adding to the tentative outlook for Q4 2020. 
  • US domestic scrap prices in October are not expected to repeat September’s $30-55/gt increases depending on grades and region. Both buying and selling market participants are leaning towards an expectation of strong sideways to a $10-20/gt increase in October prices against September settled levels depending on the region.
  • Imports risk is also a consideration for domestic mills in the evaluation for price increases. Rebar import prices are near the same levels as domestic prices making the latter a preferred option for most buyers on price, financing terms, and delivery dates. Moving forward, an increase in lead times and in domestic prices would give buyers incentive to evaluate import options.

 

India

  • The index for sponge iron remained unchanged from Thursday del Mandi mills but declined by Rs100/mt from a week ago. In Mumbai, the index declined by Rs100/mt del mills from Thursday and by Rs300/mt from a week ago.
  • Steel companies are diverting oxygen supplies to various hospitals caring for COVID-19 patients. This could hamper production at mills.
  • The daily Davis Index for billet in Mumbai surged by Rs450/mt ($6.13/mt) from the previous Friday following a rise in rebar prices along with improvement in trading activities earlier in the week. The daily Davis Index for rebar dropped by Rs700/mt ($9.53/mt). However, market participants strongly believe sentiments could turn positive in a week’s time.
  • In Raipur, the daily index for billet rose Rs400/mt ($5.44/mt) from the previous Friday on higher sponge prices. The daily Davis Index for rebar increased by Rs200/mt ($2.72/mt), but demand was moderate throughout the week.
  • In Mandi Gobindgarh, the daily index for ingot rose Rs400/mt ($5.44/mt) from the previous Friday with a similar increase in local scrap prices while the index for rebar rose Rs200/mt amid low volumes.
  • In Kutch, the bi-weekly index for billet remained flat on Thursday from the prior week as export prices supported the market. The bi-weekly index for rebar rose marginally by Rs100/mt ($1.36/mt). 
  • In Durgapur, the bi-weekly index for rebar rose byRs275/mt on Thursday from the prior week amid sluggish demand. Manufacturers expect a hike in prices by end of this week. The index for billet also rose on similar lines by Rs200/mt from the prior week.
  • In Chennai, the index for rebar rose by Rs250/mt, while the index for billet remained unchanged from the prior week amid a lull in finished steel demand. ($1=Rs73.58)

 

Shipbreaking 

  • Shipbreaking scrap prices rose this week amid supply shortage and gradual increase in demand from the mills. The index for HMS attachments and Melting rose by Rs550/mt ($7.49/mt) ex-Alang on Friday as compared to September 11. 
  • Yards in Alang face a shortage of industrial oxygen as the government has earmarked a higher share of oxygen for medical use and is prioritizing supply of oxygen to hospitals to treat critically ill COVID-19 patients.
  • Mills have lower scrap inventories, which will be utilized next week. The index for 8Ani rose by Rs700/mt ex-Alang in the same period. Demand for steel plates has picked up on account of consumption from the auto sector.
  • The index for 2kg plates rose by Rs900/mt ex-Alang on Friday as compared to the previous Friday, and the index for 5kg plates rose by Rs800/mt ex-Alang in the same period. ($1=Rs73.41)

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