Domestic ferrous scrap prices in most Asian markets trended flat to up. Offers from the US and Europe increased which pushed mills to opt for domestic scrap. In Japan, domestic prices remained flat this week, while export prices rose on global cues.
South Korean domestic ferrous scrap prices trended flat this week. Hyundai, Posco and other Korean steel mills increased domestic scrap prices by KRW10,000/mt ($8.8/mt) for Pohang this week as rising imported scrap offers push prices higher. Traders said Koreans might opt out of the market as demand for scrap remains limited due to high inventory with mills who prefer domestic scrap. No deals in containerised or bulk were heard.
The Davis Index for domestic Heavy A, Tuesday, settled flat at KRW320,000/mt ($283/mt) delivered Incheon, and rose by KRW10,000/mt at KRW32,5000/mt delivered Pohang mill, respectively, with deals heard at index price. Most mills preferred lower-priced Light A scrap with the weekly Davis Index for domestic Light A settling up by KRW10,000/mt at KRW305,000/mt delivered Pohang mill. Trades for the grade were reported at the index price.
Feng Hsin raised rebar and scrap prices this week by TWD300/mt on Tuesday. This is the second raise in two weeks due to rising imported scrap prices and shortage of ferrous scrap in the domestic market. Market participants indicated that mills had to raise rebar prices to offset higher scrap prices. Feng Hsin’s base offers for rebar was at TWD15,200/mt ex-works.
The weekly Davis Indexes for domestic HMS 1&2 (80:20) in South and North Taiwan rose by TWD300/mt ($10.5/mt) at TWD7,900/mt ($276/mt) and TWD8,100/mt delivered southern and northern mill, respectively. Offers increased on the back of firm global scrap prices and domestic ferrous scrap shortage. With a renewed budget by the Taiwanese government, market participants expect the infrastructure sector and the overall economy to boost finished steel demand in the coming months.
In seaborne markets, US-origin containerized HMS 1&2 (80:20) offers rose to $285-287/mt cfr Taiwan but no deals heard on Tuesday. Most bids were at $278-280/mt with deals heard at $283-285/mt on Monday. Buyers could give in and raise bids if scrap prices continue to rise in the international markets. The daily index for containerized US-origin HMS 1&2 (80:20) was flat at $283/mt cfr Taiwan on Tuesday.
In the bulk market, no deals were heard with steel mills being cautious of rising imported scrap.
The weekly Davis Index for HMS 1&2 (80:20) was flat this week at VND7,000,000/mt ($301/mt) delivered South Vietnam inclusive of taxes, with limited deals heard at the index price. Due to Typhoon Goni and flood in central Vietnam, domestic markets came to a standstill with no deals heard in the domestic market. Shortage of ferrous scrap and logistical issues during the storm made steel mills delay buying this week, said traders.
Suppliers on the other hand were not interested in accepting lower bids for bulk shipments. In the bulk market, no deals were confirmed on Tuesday due to the storm alert and public holiday in Japan. Offers for Japanese #2 HMS were at JPY28,500-29,000/mt on Tuesday. Containerised imports saw no rise in import volumes as Vietnamese mills focused on bulk scrap purchase.
In China, Shagang Steel raised finished steel prices for November deliveries, which impacted ferrous scrap prices. The weekly Davis Index for the HMS 1&2 (80:20) settled at CNY2,725/mt ($399/mt) delivered mill, up by CNY60/mt. Scrap prices might rise further, driven by a rise in demand for billets in the domestic market.
Prices for Q235 150mm square billets in Tangshan, North China’s Hebei province, rose by CNY60/mt to CNY3,490/mt ex-works, including the 13pc VAT. This, mainly since small rebar manufacturers resumed production after pausing operations for a fortnight to control pollution.
With the new grading for ferrous scrap rolled out by the Chinese government, many market participants are expecting an improvement in ferrous scrap quality and quantity.
The weekly Davis Index for domestic HMS 1&2 (80:20) was unchanged at THB9,500/mt ($306/mt) delivered Rayong mill inclusive of taxes, but up $2/mt due to the depreciation of Thai Baht. Deals were heard for the grade at the index price.
A few trades for South American HMS 1&2 (80:20) were at $285/mt cfr this week and offers then rose to $295/mt cfr. Deals were also heard for P&S 5ft at THB9700/mt on Tuesday. But sluggish domestic steel demand is still a cause of concern for many mills in Thailand.
Scrap demand could also dip in the coming days as mills have enough inventories to fulfill their production requirements.
The weekly indexes for HMS 1&2 (80:20) were flat at MYR1,000 /mt ($240/mt), and MYR1,100/mt ($264/mt) delivered western mills and eastern mills including taxes, respectively. Malaysia has extended its pandemic-related lockdown till Nov 10, pressuring steel demand. Mills are thus likely to delay scrap purchases.
Still, offers for US-origin HMS 1&2 (80:20) rose by $10/mt to $280-290/mt cfr, mainly following bullish global cues.
($1= JPY104.6; TWD28.6; CNY6.7; THB31; MYR4.16; VND23.1; KRW1,132)