Last week in ferrous: a summary

Turkey:

• The daily Davis Index for Turkish imports of US-origin HMS 1&2 (80:20) declined by $0.34/mt to $249.81/mt cfr on Friday. 
• Buyers were very active in Turkey’s ferrous scrap market at the end of the week, as they couldn’t delay June cargo bookings any longer. Moreover, there are holidays next week in Turkey. 
• Turkish mills purchased around 300,000mt of scrap on May 20-22 (9 deep-sea and 4 short-sea cargoes). 
• Daily domestic rebar spot prices rose by TRY20-40/mt ($3-6/mt) across Turkey and settled at TRY3,230-3,290/mt ex-works, including 18pc VAT, on Friday. 
• Exported rebar prices in Turkey increased by $5/mt to $400-405/mt fob, while exported billet prices moved to $375/mt fob from $370-375/mt fob earlier. ($1 = TRY6.81) 
• The weekly Davis Index for Turkish DKP scrap (equivalent to bonus grade) decreased by TRY18/mt ($3/mt) to TRY1,809/mt delivered on Friday and for extra grade scrap (equivalent to HMS 1&2 [85:15]) dropped by TRY21/mt ($3/mt) to TRY1,705/mt delivered. 
• Turkish mills remain diverged on pricing policies in the domestic ferrous scrap market, depending on their requirements. Some producers did not revise purchase prices for the material this week, while others decided to decrease them. ($1 = TRY6.81) 

UK: 

• Davis Index’ weekly north and south UK HMS 1&2 (80:20) ferrous scrap indices rose by £6/mt ($7/mt) and £3/mt to £136/mt delivered dockside and £133/mt delivered, respectively, on Tuesday. 
• UK dockside ferrous scrap purchase prices increased this week, as some bulk exporters who were rumoured to be holding short positions had to pay marginally higher prices to secure volumes and fill pre-existing orders. 
• However, major UK processors are unlikely to have winced at the latest increase given that dockside prices remain approximately £35/mt below their European peers who have paid €190/mt (£170/mt) for grades equivalent to HMS 1&2 (80:20). (£1 = $1.22 €1.12) 

Spain:

• Davis Index’ weekly northern Spain HMS 1&2 (80:20) and shredded ferrous scrap small bulk indices edged down by €5/mt ($5/mt) to €215/mt and €225/mt cfr, respectively, on Friday. 
• Benchmark Spanish ferrous scrap import tags largely followed cues set by developments in the European export and Turkish deep-sea and short-sea import markets this past week.
• Spanish steel production, and ferrous scrap consumption, has remained relatively subdued in response to weak downstream demand, reduced operating rates, and an unconfirmed mill outage. 

CIS:

• The weekly Davis Index for HMS 1&2 (80:20) or A3 scrap in Russia’s Baltic Sea region was unchanged at $232/mt fob on Friday, while the index in the Black Sea region increased by $4/mt to $229/mt fob. 
• Trading activity increased in Russia’s ferrous scrap export market, as demand from Turkish mills, the country’s main buyers, significantly improved and they agreed to accept higher prices during the latter half of the week. 
• Negotiations resulted in deals between Turkish mills and two suppliers from St Petersburg. One exporter agreed to $247/mt cfr for HMS 1&2 (80:20) and to $257/mt cfr for bonus material, while the other one signed a contract at $250/mt cfr for HMS 1&2 (80:20) and at $260/mt cfr for bonus material. Each supplier sold around 30,000mt. Earlier in the week, bids from Turkish producers were at $240-242/mt cfr. 
• A supplier from the northern Russia sold HMS 1&2 (95:5) to Turkey for $260/mt cfr, with around 17,500mt to be shipped from Murmansk and 7,000mt to be shipped from Arkhangelsk. 
• The weekly Davis Index for A3 scrap in St Petersburg dock declined by RUB250/mt ($3/mt) to RUB14,750/mt delivered on Friday. Exporters began reducing collection prices because they understood that $255/mt cfr Turkey for Russian-origin HMS 1&2 (80:20) is not achievable. 
• The weekly Davis Index for A3 scrap in Rostov-on-Don docks was flat at RUB13,500/mt delivered. Most suppliers from the Russia’s south sold their cargoes to Turkey at $245-248/mt cfr for A3 scrap around 10 days ago. ($1 = RUB71.92) 

USA docks:

• In Boston, the weekly Davis Indexes for export yard buying prices increased by $1/gt .
• US East Coast and Houston dock collection prices for ferrous scrap hardly changed save for nominal price moves, across all grades and dock locations on low sales to Turkey and Asia. 
• East Coast docks are aiming to lower collection prices, but sellers reported moving material to the docks this week at May 12 prices. Some deals reported at the end of last week involved price decreases. 
• The weekly Davis Indexes in Houston were flat on Tuesday for HMS 1&2 (80:20) at $204/gt delivered, and in New York HMS 1&2 (80:20) increased by $1/gt to $200/gt delivered on Tuesday.
• The weekly Davis Indexes for West Coast dockside ferrous scrap were unchanged for the second consecutive week at Los Angeles, San Francisco, and Portland ports. 
• Dock prices have, in fact, remained unchanged in Los Angeles since early April and are unlikely to increase until June 1, Davis Index learnt. Dock prices in Portland increased in early May before trending flat for two straight weeks. 
• Market participants are reporting an upward price sentiment in the export market with slightly higher container prices and on rumors of some recent bulk deals, although specifics of those transactions are not fully available. However, the upward trend is not yet reflected at the docks. 
• In Portland, scrap yards report that domestic scrap prices are more attractive than dock prices. Domestic deliveries require additional processing for domestic buyers, but the differential is considered worth the investment. 
• Some market participants on the buying side, however, believe that adequate amounts of inventories are flowing into the dock and the change in weather conditions into summer may see increased supplies. 
• Japanese ferrous export prices ticked up from Japanese shores last week. The increase in export pricing provides support for US sellers as Japan is an alternate source to send scrap to Asian markets. 
• In Los Angeles, the weekly Davis Indexes remained unchanged with HMS 1&2 (80:20) at $135/gt delivered dockside.

USA containers:

• Prices for containerized ferrous scrap increased in New York and Seattle but remained rangebound in Los Angeles and San Francisco. This marks the second straight weekly increase this month on the East Coast, after flat index movements the first week of May.  
• The weekly Davis Index in New York for HMS 1&2 (80:20) rose by $2/mt to $215/mt fas. 
• Export buyers are finding it difficult to compete against substantially more attractive US domestic prices. In May, #1 busheling was heard at $310-330/gt delivered to mill from the East Coast, depending on distance. Sellers, however, are preferring to retain inventories because of a sideways to slightly up outlook on domestic scrap prices.  
• Containerized prices in Los Angeles and San Francisco remained rangebound. Some buyers from Taiwan have finished purchasing for the month while others, due to uncertainty in own domestic finished steel markets, refuse to increase buying prices. 
• Higher Japanese scrap export prices may provide support for containers next week, but several market participants are forecasting a continued sideways pricing market for the remainder of May.  In Los Angeles, the weekly Davis Indexes trended flat across all grades with HMS 1&2 (80:20) at $204/mt. 
• Upward momentum on pricing was expected as buyers sought inventories and fas prices were regionally lower, last week. 

Mexico: 

• Domestic ferrous prices fell for most grades in North Mexico but increased in the central area despite concerns over low supply.  
• In northern Mexico, the weekly Davis Index for HMS 1&2 (80:20) fell by MXN23/mt to MXN5,550/mt ($243.5/mt) delivered Mexico consumer on Friday. 
• Market participants remained concerned over low scrap supply, which is expected to continue over the next few weeks despite the economy and manufacturing facilities looking to restart completely by June 1, after a government-imposed shutdown to contain COVID-19. ($1= MXN22.7) 

Taiwan:

• Imported ferrous scrap prices in Taiwan inched down while mills booked limited trades amid ongoing rainy season and weak finished steel sales. Trades for containerised US-origin HMS 1&2 (80:20) concluded flat at $228-230/mt cfr Taiwan. Later, a few bids dropped to $220-225/mt cfr Taiwan. 
• In South Taiwan, Feng Hsin Steel held domestic ferrous scrap purchase prices for HMS 1&2 (80:20) and rebar prices unchanged at Taichung plant. A forecast of rain for 10 successive days and power cuts announced by the Taiwan government in June would keep the demand for scrap subdued.  Traders are expecting ferrous scrap rates to go up with Turkey mills raising buying prices. 
• Japanese HMS 1&2 (50:50) was offered at $250-255/mt cfr Taiwan. But bids were at $240-245/mt, an increase of $10-15/mt from prior Monday. 
• In small bulk markets, Japanese suppliers sold shredded at $245-250/mt cfr Taiwan, up by $5/mt from the prior week. 

Japan:

• Japanese ferrous scrap export prices rose by JPY1,000-1,500/mt from the prior week. Japanese ferrous scrap export prices moved up further to JPY23,000-23,500/mt fob Japan.
• South Korean mills booked Japanese ferrous scrap at JPY23,500/mt fob Japan. Scrap suppliers were waiting for Hyundai Steel’s tender result on Thursday for a price direction. 
• Domestic scrap prices also increased this week as Tokyo Steel raised prices by JPY1,000/mt for all grades of scrap at all major plants effective May 22. New bids for #2 HMS are at JPY19,500/mt del to Utsunomiya and Tahara work, up from the previous set of prices last revised on April 28.  
• The weekly index for #2 HMS settled at JPY21,500/mt fas Tokyo bay on Wednesday, up by JPY500/mt. Scrap collection rates dropped significantly this week. Prices for higher grade scrap remained unchanged with both, demand and supply limited. 

Vietnam:

• Vietnamese mills booked bulk Japanese cargoes this week at increased prices by $5-10/mt. In small bulk markets, Japanese #2 HMS traded at $250-255/mt cfr South Vietnam. HMS 1&2 (50:50) traded at $255/mt cfr Vietnam, up $5/mt form the prior week. 
• The index for US origin containerised shredded settled at $250/mt cfr, up by $5/mt from $245/mt cfr Vietnam prior week. 

Indonesia:

• Indonesian mills continued booking seaborne scrap. Trades are likely to dip for a week due to Eid holidays.
• Offers from US suppliers moved up on short supply. US-origin shredded in TEUs was offered at $250-255/mt cfr Jakarta, up by $5/mt from the prior week. The Davis Index for containerised P&S 5ft settled at $256/mt cfr Jakarta, up by $1/mt from the prior week.

South Korea: 

• US-origin suppliers offered HMS 1&2 (80:20) at $235/mt cfr South Korea. 
• South Korean domestic ferrous scrap prices rose by KRW10,000/mt from the prior week. Major mills have been booking imported scrap from Japan and Australia since the past week on falling inventories. 
• The weekly Davis Index for domestic Heavy A settled at KRW290,000/mt ($237/mt) del Incheon, up by KRW10,000/mt. 

China:  

• Chinese domestic ferrous scrap prices rose on increased steel prices in the country. Shagang steel hiked rebar and wire rod prices in the domestic market by CNY50/mt ($7/mt) for late May deliveries from last set of prices. 
• Shagang Steel increased bids for domestic #2 HMS (6-10mm thickness) by CNY120/mt from the prior week to CNY2,640/mt del Jiangsu plant inclusive of the 13pc VAT. Ferrous scrap prices in China rose on the back of supply crunch and supportive profit margins of EAF steelmakers in the country.  
• The weekly Davis Index for domestic HMS 1&2 (80:20) settled flat at CNY2,600/mt ($332/mt), up CNY50/mt inclusive of 13pc vat delivered to mill in eastern China, rising four months high.  

Thailand:

• Thailand’s domestic scrap prices rose on the back of increased demand in the country. The weekly Davis Index for domestic HMS 1&2 (80:20) settled at THB7750/mt ($243/mt) delivered Rayong inclusive of taxes, up by THB50/mt. 
• Traders booked Australian origin HMS 1&2 (80:20) in containers at $228-230/mt cfr Thailand.  A leading EAF mill booked a USWC bulk cargo of shredded at $272/mt cfr Thailand. 

Malaysia: 

• The weekly Davis Index for domestic HMS 1&2 (80:20) settled at MYR900/mt ($205/mt) delivered western mills, up by MYR5/mt and the index for HMS 1&2 (80:20) delivered eastern mills settled at MYR935/mt inclusive of taxes, up by $10/mt from the prior week.
• US-origin HMS 1&2 (80:20) traded at $220-225/mt cfr Port Klang.  

Pakistan:

• Pakistan steelmakers continued to book ferrous scrap in limited quantities. Operations in most regions have resumed with lockdown restrictions eased but many buyers were away from the market due to the ongoing Eid holidays. Bookings are expected to rise after the Eid festival ends on May 31. 
• The daily Davis Index for US-origin containerized shredded settled at $279/mt cfr Port Qasim on Friday, up by $6/mt. On Friday, offers moved up to $285/mt cfr Qasim, following bullish global bulk markets. Suppliers expect prices to climb further as Turkish mills have resumed activities.  
• The government of Dubai released a clarification stating steel scrap exports would be banned for four months and could be extended further to support domestic industry. 
• Domestic rebar and billet prices moved up by PKR500-1000/mt from the prior week, however, sales are expected to increase and prices to drop post Eid holidays. 

Bangladesh:

• Trades for imported ferrous scrap in Bangladesh remained subdued amid ongoing Eid holidays and declined domestic steel demand. On May 20, cyclone Amphan slammed coastal areas of Bangladesh along with Indian states of West Bengal and Odisha. 
• The impact has disrupted operations at Chattogram port, hitting import trades. Also, casual labourers have left for their hometowns to celebrate Eid holidays, slowing mill activity.
• Bangladesh Steel Manufacturers Association (BSMA) demanded stimulus package worth BDT30,000mn from the government to make up for an equal amount of losses amid the pandemic. 
• In bulk markets, offers for mixed scrap cargoes were reported at $285-295/mt cfr Chattogram, with no buying interest in the market.  
• In the container market, the daily Davis Index for shredded settled at $280/mt cfr Chattogram on Friday, up by $7/mt from the prior day. Early this week, trades for shredded concluded at $275/mt cfr Chattogram. Offers for shredded were in the range of $280-285/mt with no bids in the market. 
• The Davis Index for domestic HMS 1&2 (80:20) settled at BDT26,500/mt inclusive of local taxes ex-yard Chattogram, unchanged from the prior week. 

India:

• Indian mills resumed ferrous scrap imports after over two months of silence. Piled up consignments at ports have started clearing up. Only a few bookings for July shipments were reported. Large scale procurement, however, seems to be a remote possibility. 
• Some mills have resumed operations at 30pc capacity. Major mills continued to export billets and HRC in bulk volumes to China and Southeast Asia on subdued domestic steel demand.  
• Most mills faced documentation issues due to reduced banking hours. Shortage of manpower also added to their woes. Though, with automakers gradually resuming production, steelmakers are hopeful of demand returning in the coming days.  
• The daily Davis Index for containerised shredded settled at $273/mt cfr Nhava Sheva on Friday, up by $10/mt. Over the week offers increased by over $10-12/mt. Though there are no buyers for shredded at present. 
• Few UK and European suppliers are offering shredded in containers at $280-285/mt cfr Nhava Sheva on Friday. But buyers were not keen to book at those prices with bids around $260/mt cfr Nhava Sheva.  
• The daily Davis Index for UAE-origin containerised HMS 1&2 (80:20) settled at $255/mt cfr Nhava Sheva, up by $5/mt. UAE, a major supplier country imposed a ban on exports of ferrous scrap for four months. Market participants believe Oman and Bahrain are also likely to follow suit. 
• Shipbreaking activity has gradually resumed at Alang but 70pc of labourers were away from yards. 
• The daily Davis Index for HMS 1&2 (80:20) fell by Rs 300/mt ($3.94/mt) to Rs20,500/mt ($269.88/mt) on Friday del Mandi Gobindgarh. 
• Credai urged the government to regulate steel prices as real estate sector resumes operations gradually. Developers have appealed steel producers to rein in their prices. 
• Steel demand in India is expected to remain under pressure due to a steep rise in COVID-19 cases 

Metallics

• The weekly Davis Index for CIS basic pig iron increased by $4/mt to $294/mt fob Black Sea on Friday on new sales to China. 
• The weekly Davis Index for basic pig iron (BPI) increased by $8/mt from $311/mt cfr New Orleans to $319/mt cfr Nola on Thursday, as new offer prices rose on improved demand. However, supply remains scarce. 
• A strong demand for pig iron is supporting higher prices. China was the main buyer for the material from CIS this week. Two Ukrainian suppliers sold pig iron (around 100,000mt in total) at $320-325/mt cfr late in the week, while Brazilian material changed hands at $320/mt cfr China earlier. 
• CIS pig iron exporters increased offers to $320/mt cfr to all other outlets. They expect demand in Italy to improve further amid recovering steel production after the COVID-19 related lockdown ended in the country. As a result, the weekly Davis Index for CIS pig iron in Italy rose by $2/mt to $310/mt cfr on Friday. 
• In the US, domestic prices for ferrous scrap and scrap alternatives are expected to increase heading into June, along with steel prices, following mills’ offer sheet increase announcements. However, persistent market ambiguity means only soft increases have been projected.  
• Last week, several BPI cargos were unloaded and shipped upriver to Midwest mills, which have, according to market participants, met requirements for the grade and aren’t looking for more material until July. 
• The last BPI deals in the US were for $305-310/mt cfr Nola from Brazil and CIS. Brazilian and CIS-origin producers are offering material at $325-355/mt cfr Nola this week for August shipment. 
• No sales have been confirmed for about two weeks since most prompt material is already shipped or booked. Higher offer prices may become firm if demand rises, although that is also contingent on domestic scrap prices, among other industry dynamics, next month. 
• The Index for nodular pig iron (NPI) imports remained unchanged $365/mt cfr Nola, as offers this week have been around $360-370/mt cfr Nola with no confirmed sales. 
• The weekly Davis Index for US hot briquetted iron (HBI) imports were flat at $223/mt cfr Nola on Thursday, amid low demand and activity for the grade.