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Ferrous: Week 24 summary

Ferrous Scrap

 

Turkey:

  • The daily Davis Index for Turkish imports of US-origin HMS 1&2 (80:20) rose by $1/mt to $266.91/mt cfr on Friday.
  • High buying activity by mills. The most recent deal on June 11 by an Iskenderun-based integrated steel mill purchased 22,000mt of HMS 1&2 (80:20) at $267/mt cfr and 10,000mt of bonus material at $277/mt cfr from Russia (St Petersburg).
  • Steelmakers in Turkey booked more than 1mn mt of ferrous scrap for July shipment. 
  • Many believe that prices have peaked. However, some sellers believe Turkish mills will continue scrap purchases if steel products sales will remain active and prices could reach $270/mt cfr Turkey on HMS 1&2 (80:20).
  • Turkish producers raised domestic purchase prices for shipbreaking scrap by $3/mt to $255/mt delivered.
  • Daily domestic rebar spot prices climbed by TRY20-30/mt ($3-4/mt) across Turkey to settle at TRY3,430-3,480/mt ex-works, including 18pc VAT, on Friday. 
  • The Turkish domestic billet market was busy too. Many sales were done at around $400/mt ex-works for prompt delivery during the week. ($1 = TRY6.84)

 

CIS:

 

  • On June 10-11, a Russian exporter sold A3 material at $264/mt cfr and at $265/mt cfr to the Karadeniz region in Turkey from the Azov-Black Sea basin.

 

Europe:

 

  • The weekly Davis Index for HMS 1&2 (75:25) in the ARAG region increased by €3/mt ($3/mt) to €200/mt delivered dockside on Tuesday.
  • Dockside ferrous scrap prices continue to tick up in Europe. Last week only some suppliers in the Netherlands and Belgium raised collection prices to €200/mt delivered, but others followed them this week amid persisting exports demand and active trading. (€1 = $1.13)

 

UK:

 

  • Davis Index’ weekly north and south UK HMS 1&2 (80:20) ferrous scrap indices remained unchanged over the past week at £145/mt ($184/mt) delivered dockside.
  • While UK HMS 1&2 indices were unchanged, data contributions from bulk processors and merchant suppliers showed a significant widening in high-low spreads across the country.
  • Davis Index noted that one large bulk ferrous scrap exporter had been paying up to a maximum of £155/mt for HMS 1&2 grades to secure volumes over the past week.
  • Docks holding relatively sufficient stocks have managed to keep HMS 1&2 dockside purchase prices to as low as £135-140/mt this week. (£1 = $1.27)
  • Davis Index’ monthly UK 1&2 ferrous scrap consumer index increased by £15/mt ($19/mt to £165/mt delivered mill following the conclusion of June mill-yard negotiations.
  • Much of the merchant ferrous scrap trade has returned to work following the easing of restrictions over the past month, but the improvement in local supply and corresponding impact on prices failed to transpire given robust demand strength from the export market.
  • HMS 1&2 (80:20) supported to fresh three-month highs of $265.91/mt cfr on June 11.
  • UK-based bulk ferrous scrap exporters have correspondingly increased their dockside purchase prices by £15-20/mt to secure sufficient volumes, which has unsurprisingly prompted domestic smelters to pay higher prices to compete for local material. (£1 = $1.25)

 

Spain:

 

  • Davis Index’ weekly northern Spain HMS 1&2 (80:20) ferrous scrap small bulk index dropped by €3/mt ($3/mt) to €218/mt, respectively, on Friday.
  • A UK-based trader highlighted the near-term vulnerability in the Spanish import market despite modest price hikes on major seaborne trade routes, particularly to Turkey.
  • The trader added that domestic supply availability had seemingly improved, and this resulted in buyers’ bids softening from the prior week’s levels.
  • A Spanish buyer commented that import prices had now corrected and normalized to what they considered the right level but noted that they would now have to compete with other deep-sea markets for future cargoes. (€1 = $ 1.13)

 

US docks:

  • US East Coast and Houston dock collection prices for ferrous scrap increased by $1-8/gt, for all grades and dock locations. Price strength and growth are gradually being sustained off the East coast, as exporters currently load vessels, but some sellers aren’t confident upward prices will endure.
  • The weekly Davis Indexes for export yard HMS 1&2 (80:20) increased by $4/gt across USEC areas as Boston increased to $218/gt delivered dock, New York increased by $4/gt to $221/gt delivered, and Philadelphia increased by $4/gt to $219/gt delivered.  
  • The weekly Davis Indexes in Houston increased by $7/gt for HMS 1&2 (80:20) to $218/gt delivered.
  • The Davis Indexes for dockside ferrous scrap on the US West Coast increased for the second straight week, supported by stronger export demand, tight supply, and higher prices to export destinations.
  • Domestic mills in Portland increased scrap prices by $10-15/gt during the early June domestic scrap trading week. Dock prices in the area also increased to attract inventories. 
  • Higher Japanese domestic and export prices supported US increases.
  • The weekly Davis Indexes for HMS 1&2 (80:20) increased in Portland to $190/gt delivered dockside, increased in Los Angeles to $147/gt delivered dockside, and increased in San Francisco to $190/gt delivered dockside.

 

US containers:

 

  • Buyers from India, Pakistan, and Bangladesh who transacted scrap deals from the East Coast reported subdued demand. India is affected by a shortage of labour as well as interruptions in logistics and supply chains. Pakistani mills are also facing liquidity issues and a pending government budget.
  • Market participants anticipate a correction on containerized ferrous scrap prices due to weak finished steel demand.
  • The weekly Davis Index in New York for #1 busheling decreased by $3/mt to $252/mt fas and fell for HMS 1&2 (80:20) by $3/mt to $225/mt fas.  
  • Containerized exports pricing on the East Coast was scattered. Some sellers reported sales at higher than index levels, but buyers were also able to lock in deals at lower prices throughout the week.
  • On the West Coast, deal activity at progressively improved prices increased through the week.
  • Japanese ferrous scrap export prices rose as the monthly Kanto Tetsugen prices increased.
  • Mills in South Korea focused efforts on purchasing domestic scrap as import prices increased over the past month. West Coast sellers also expressed concern that the idling of the large Hyundai steel Danjin operation may dampen prices.
  • The weekly Davis Indexes in Los Angeles increased by $7/mt to $226/mt for HMS 1&2 (80:20) while the grade increased in San Francisco by $6/mt to $219/mt fas. 

 

Mexico:

  • Mexico’s domestic ferrous scrap prices rose for most grades in the country’s Bajío and northern regions on Friday.
  • In the North, prices are expected to fall over the next few months as supply and demand balances after the automotive industry resumed production in the region.
  • Mexico’s mining, construction, and manufacturing industries recorded a drop in their activity in April this year compared the same month the prior year, due to the effects of COVID-19 pandemic.
  • In northern Mexico, the weekly Davis Index for HMS 1&2 (80:20) fell by MXN35/mt to MXN5,965/mt ($266.7/mt) delivered Mexico consumer on Friday.
  • The weekly Davis Index in Bajío increased by MXN75/mt to MXN5,825/mt delivered Mexico consumer for HMS 1&2 (80:20).

 

Japan:

 

  • Japan’s monthly ferrous scrap export tender, Kanto Tetsugen concluded on June 10 with average bids up by JPY3,880/mt ($31/mt) for total 21,000mt at JPY26,360/mt ($245/mt) fas Tokyo Bay compared to JPY22,480/mt fas Tokyo Bay in May. Kansai smaller scrap export tender also concluded on Wednesday with an average of winning bid up. 
  • Tokyo steel raised its domestic scrap purchase prices six times this month. This week, the mill raised its bids by a total of JPY1,500-2,500/mt for all its plants. 
  • Trades of Japanese bulk cargoes consisting of #2 HMS with South Korean, Vietnamese and Taiwanese mills concluded at JPY25,000-26,000/mt fob Japan, up by JPY1,500-2,000/mt from the prior week. 
  • The weekly Davis Index for #2 HMS settled at JPY26,500/mt ($247/mt) fob Japan, up by JPY1,750/mt. Offers then rose to JPY27,000/mt fob Japan. HS scrap traded at JPY28,000-28,500/mt fas Tokyo. ($1=JPY107.25)

 

Taiwan:

 

  • Imported ferrous scrap prices in Taiwan rose by $11/mt from the prior week with the index for US-origin HMS 1&2 (80:20) settling at $249/mt cfr Taiwan on Friday. Trades for containerised HMS 1&2 (80:20) were reported at $244-250/mt cfr Taiwan, even though offers were at $252-$253/mt cfr Taiwan. 
  • Deals for South American-origin HMS 1&2 (80:20) were heard at $235-240/mt cfr Kaohsiung. Offers for Australian-origin HMS 1&2 (80:20) were at $240-245/mt cfr Taiwan. 
  • In small bulk markets, Japanese HMS 1&2 (50:50) traded at $270-275/mt cfr Taiwan, up by $10-15/mt from the prior Friday. 
  • The weekly Davis Index for domestic HMS 1&2 (80:20) in south Taiwan settled at NT$7,200/mt ($242/mt) del plant, up by NT$300/mt from the prior Tuesday. Limited trades were reported due to the ongoing rainy season in Taiwan.  
  • In South Taiwan, Feng Hsin Steel hiked domestic ferrous scrap purchase prices for HMS 1&2 (80:20) by NT$300/mt to NT$7,100/mt delivered Taichung plant from the prior week. ($1=NT$29.63)

 

Vietnam:

 

  • A rise in Japanese export prices forced Vietnamese mills to slow their ferrous scrap purchases. Japanese #2 HMS traded at $280-285/mt cfr Vietnam, up by $15-20/mt from the prior week. Offers for US bulk HMS 1&2 (80:20) rose to $275-280/mt cfr Vietnam, up by $5-10/mt from the prior week. 
  • In small bulk markets, the index for HMS 1&2 (50:50) settled at $283/mt cfr Vietnam, up by $18/mt from the prior week. Japanese HMS 1&2 (50:50) traded at $270-275/mt cfr South Vietnam and Hong Kong-origin material at $280-285/mt cfr North Vietnam. 
  • In containers market, US-origin HMS 1&2 (80:20) in TEUs was offered at $255/mt cfr Haiphong, with its index settling at $250/mt cfr, up by $5/mt from last week. 
  • The Davis Index for HMS 1&2 (80:20) settled at VND6,100,000/mt ($262/mt) delivered South Vietnam inclusive of taxes, up by VND50,000/mt from the prior week. ($1=VND23,209)

 

Indonesia:

 

  • Imported ferrous scrap trades were limited amid bullish prices and low steel demand. 
  • A few offers for HMS 1&2 (80:20) were at $255/mt cfr Indonesia with the index settling at $250/mt cfr, up by $12/mt compared to the prior week.’
  • US-origin shredded in FEUs was offered at $270/mt cfr Jakarta, up by $10/mt against the prior week. The Davis settled at $268/mt cfr Indonesia, up $10/mt week on week.

 

South Korea:

 

  • Major mills scaled-down production on weakened demand. Posco steel will postpone the resumption of its idled blast furnace at Gwangyang plant to the end of the June on weak demand. 
  • The weekly Davis Index for containerised HMS 1&2 (80:20) settled at $245/mt cfr South Korea, up by $5/mt from the week prior. 
  • The index for containerised shredded and #1 HMS settled at $255/mt and $252/mt cfr South Korea, respectively, both up by $9/mt. Steel mills were away from bulk bookings from the US and Russia.
  • South Korean domestic ferrous scrap prices increased for a second successive week. Scrap inventories with major mills declined with a rise in finished steel demand from overseas markets. Steelmakers, including Dongkuk, SeAH, YK, Daehan, Hyundai Steel raised domestic scrap purchase prices by KRW10,000-15,000/mt del plant.  
  • The weekly Davis Index for domestic Heavy A settled at KRW315,000/mt ($262/mt) del Incheon, up by KRW25,000/mt, from the prior Tuesday. The weekly Davis Index for domestic Light A settled at KRW275,000/mt delivered Pohang plant, up KRW22,500/mt. ($1=KRW1190.73) 

 

China:

 

  • Chinese rebar and HRC export prices increased driven by higher steel futures and increased iron ore import prices on fears of supply disruption post the suspension of Vale’s mine in Brazil. The rainy season, however, pulled trades and prices down in the late week.  
  • Shagang Steel headquartered in Zhangjiagang, Jiangsu province, kept bids for domestic #2 HMS (6-10mm thickness) unchanged. The weekly Davis Index for domestic HMS 1&2 (80:20) settled at CNY2,625/mt ($370/mt) inclusive of 13pc vat delivered to mill in eastern China, increased by CNY25/mt.  
  • In the domestic market, prices for billet remained in the range of CNY3,330-3,350/mt ex-Tangshan mill. Baosteel hiked HRC and CRC shipment prices for July deliveries by CNY280/mt ($39.59/mt) from June. Ansteel and other flat steel producers raised HRC prices by CNY200-300/mt from the prior month. ($1=CNY7.08)

 

Thailand:

 

  • The weekly Davis Index for domestic HMS 1&2 (80:20) settled at THB8,500/mt ($271/mt) delivered Rayong inclusive of taxes, up by THB700/mt. The rise was fuelled by increased billet prices and limited availability of ferrous scrap in the domestic market. 
  • Containerized imported scrap from South and Central America traded at $235/mt cfr Thailand. ($1=THB31.35)

 

Malaysia:

 

  • The weekly Davis Index for domestic HMS 1&2 (80:20) settled at MYR975/mt ($228/mt) delivered western mills, up by MYR45/mt. 
  • The index for HMS 1&2 (80:20) delivered eastern mills settled at MYR1,010/mt inclusive of taxes, up by $40/mt from the prior week. ($1=MYR4.28)

 

India:

 

  • The Davis Index for containerised shredded settled at $286/mt cfr Nhava Sheva, up by $1/mt from the prior week. Offers for shredded from UK and Europe and the US were in the range $285-290/mt cfr Nhava Sheva. 
  • Concerns over liquidity crunch, labour shortage and subdued construction activity during the monsoons are likely to hit overall steel demand. A few buyers withdrew their bids amid bullish global ferrous scrap prices and a possibility of increased restrictions to control the spread of COVID-19 in India.
  • The index for US-origin HMS 1&2 (80:20) was at $270/mt cfr Nhava Sheva, up by $5/mt from the prior end of week. Offers for the US and UAE-origin HMS 1&2 (80:20) were at $275-280/mt cfr Nhava Sheva with no buyers interested in those levels. 
  • In Raipur, the daily Davis Index for rebar remained flat at Rs34,200/mt ex-works Raipur. The daily index for billet fell by Rs50/mt and settled at Rs28,950/mt ex-works Raipur. 
  • The Davis Index for rebar in Mumbai remained unchanged from Thursday at Rs34,300/mt ($452.08/mt) ex-works amid limited trading in the finished steel market. The index for billet dropped by Rs250/mt to Rs29,050/mt ex-works. 
  • The daily Davis Index for 8Ani declined by Rs100/mt to Rs25,750/mt, 12Ani fell by Rs200/mt to Rs26350/mt ex-Alang on Friday. Total 6 ships beached at Alang with a total tonnage of 53,040.33/LDT in June.

 

Pakistan:

 

  • Demand for imported ferrous scrap in Pakistan continued to improve as mill ramped up their production. With the new cases of COVID-19 refusing to subside, steelmakers are worried about the possibility of stringent lockdown measures which could hit economic activities once again. 
  • The national budget announced on June 12 lowered tax for raw material arriving at ports from 5.5pc to 2pc which could benefit importers.
  • The Davis Index for US-origin containerized shredded settled at $292/mt cfr Port Qasim on Friday, flat from Thursday but up by $2/mt from the prior week. Some trades were reported for UK-origin shredded at $292-294/mt cfr Qasim. 
  • Semi-finished steel prices rose by PKR3,000-4,000/mt ex-works due to increased restocking in the market. The Davis Index for G-60 billet settled at PKR 96,000/mt ex-Punjab plant, up by PKR3000/mt from the prior week. 
  • The Davis Index for G-60 rebar settled at PKR112,000/mt ex-plant Karachi and PKR111,500/mt ex-plant Punjab, both up by PKR500/mt from the prior week.
  • Domestic ferrous scrap prices in Pakistan climbed again this week on limited availability. ($1=PKR166.36)

 

 

Bangladesh:

  • Bangladesh steel mills booked limited ferrous scrap in containers. Some mills have gradually started ramping up operations to 60pc capacity compared to 40pc last week.
  • The upcoming rainy season could slow construction activity and impact finished steel demand for another two months. 
  • The country’s national budget for FY21 ending June 2021 was presented on Thursday. The budget, however, failed to announce any measures to aid the steel industry.   
  • In bulk markets, European sellers’ offers for HMS and shredded mix cargoes were at $290-300/mt cfr Chattogram. 
  • Leading steel mills stayed away from trades as their consignments booked in March and April recently made it to the ports.  
  • The daily Davis Index for containerised shredded settled at $302/mt cfr Chattogram, flat from Thursday, but up by $4/mt from the prior week. 
  • A few trades of containerised HMS 1&2 (80:20) from South America and Central America were reported at $260-265/mt cfr Chattogram. 
  • Domestic steel prices in Bangladesh continued to drop on the back of weak demand for the third week. The weekly index for domestic billet settled at BDT40,000/mt ex-works Chattogram, down by BDT1,000/mt. 
  • Domestic ferrous scrap moved up slightly on short supply. HMS 1&2 (80:20) and shipbreaking scrap equivalent to P&S traded at BDT27,500-28,500/mt inclusive of local taxes ex-yard Chattogram. ($1=BDT85.62)

 

Metallics

 

CIS:

  • The weekly Davis Index for CIS basic pig iron rose by $6/mt to $308/mt fob Black Sea on Friday after sales to the US.
  • Trading was energetic in the CIS pig iron export market. Russian suppliers closed deals with US customers at around $320/mt cfr for large pig iron tonnages, marking the first transactions since the end of May, when Ukrainian material was fixed for $312/mt cfr.
  • Chinese demand for pig iron has been strong, as well. CIS exporters believe that $340-345/mt cfr is achievable, with the most recent deals, which occurred last week, conducted at $334-335/mt cfr.
  • Some negotiations were reported in the Italian market. Referring to prices at alternative outlets, CIS suppliers raised offers to Italy to $325/mt cfr. The weekly Davis Index for CIS pig iron in Italy increased by $5/mt to $315/mt cfr on Friday.

 

US:

 

  • Pig iron prices and demand for the material are expected to remain close to current levels throughout June with little up or down movement until more clarity is provided domestically on market direction. Markets are subdued following June domestic scrap trading that settled a bit below initial expectation.
  • The weekly Davis Index for basic pig iron (BPI) increased by $5/mt from $317/mt cfr New Orleans to $322/mt cfr Nola on Thursday, amid higher sales and offer prices to the US. 
  • Two cargoes of BPI were sold to the US this week at $320/mt cfr Nola for CIS-origin material, an increase of $5/mt from sales at $315/mt cfr Nola on June 4.
  • US proposals this week are at $320-330/mt cfr Nola from the CIS, same as last week’s offer levels. South Brazilian producers sold BPI to China at $310/mt fob which relates to US offers around $330-340/mt cfr, however the material has raised levels of phosphorus, above the customary threshold of 0.12pc.
  • Offers in the US will need to align with China’s prices, in order to continue securing material.
  • The index for nodular pig iron (NPI) imports remained unchanged at $375/mt cfr Nola and the weekly Davis Index for US hot briquetted iron (HBI) imports was flat at $233/mt cfr Nola as offers are low this week, and new sales have not been confirmed for these grades.

 

India:

  • In Ahmedabad, the Davis index for sponge iron declined by Rs500/mt to Rs18,000/mt del mills on slow demand from the local market as COVID-19 cases spiked in the region.
  • In Mandi Gobindgarh, the daily Davis Index for sponge iron declined by Rs125/mt to Rs19,950/mt delivered mills.
  • In Mumbai, thin trades were reported with the daily index for HMS 1&2 (80:20) unchanged at Rs21,050/mt delivered mills on Friday and the index for sponge iron settled at Rs16,900/mt delivered mills, also flat.

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