Domestic ferrous scrap prices in most Southeast and East Asian markets were unchanged from a week ago due to limited demand for finished steel. But both, scrap and finished steel markets are expected to gain next week amid commencement of new infrastructure projects in most countries and rise in Japanese export as well as global steel prices.
Tokyo Steel raised its scrap purchase price by JPY500/mt ($4.7/mt) delivered to its Utsunomiya, Tahara, and Kyushu plants on Friday. It was the fourth price raise since July 17 and the second in August. Bids for domestic scrap at its other two works, Okayama and Takamatsu steel center, however, were kept unchanged.
Since Aug 8, purchase prices for #2 HMS were at JPY23,500/mt ($223/mt) delivered Utsunomiya works in the Kanto region, up JPY500/mt from the prior price revision on August 5.
Bids for busheling delivered to Tahara and Utsunomiya plants were at JPY26,000/mt and JPY25,500/mt del plant, respectively.
Bids for #2 HMS and busheling were at JPY24,000/mt and JPY25,500/mt delivered Kyushu, respectively. For #2 HMS and busheling deliveries to Okayama mills, bids were at JPY23,000/mt and JPY24,000/mt delivered mill, respectively.
Scrap trades in the domestic market are expected to remain slow amid maintenance activities scheduled by steelmakers. Obon festivities from Aug 13-16 will also impact trades.
In seaborne markets, prices rose by $10-15/mt this week as buyers in Taiwan, Vietnam, South Korea, and Bangladesh preferred competitively priced Japanese scrap over material from other destinations. Other supplier countries like the UK or US have raised their offers citing supply crunch.
The monthly scrap export tender, Kanto Tetsugen, is scheduled to be announced on Aug 19. The results of the Kanto tender are expected to offer further clarity on Japan’s export prices.
South Korean domestic scrap prices were largely unchanged amid limited trades. Mills kept their bids for domestic ferrous scrap unchanged from a week ago. Many buyers preferred to import material, mainly A3 scrap from Russia which was competitively priced. Volumes varied based on price levels.
The Davis Index for domestic Heavy A delivered Incheon and Pohang settled unchanged at KRW285,000/mt ($240.8/mt) and KRW280,000, respectively, with deals heard at the index prices.
The weekly Davis Index for domestic Light A also settled flat at KRW250,000/mt delivered Pohang mill. Limited trades for the grade were reported at the index price.
Among seaborne trades, a deal for Russian A3 scrap was heard at $265/mt cfr South Korea, a price which was up by $6.5/mt from the week prior. Offers for Japanese #2 HMS were at JPY25,500/mt fob Tokyo bay, up by JPY500/mt from the prior week.
Rebar and billet prices were flat this week in Taiwan, which also governed the price of domestic ferrous scrap.
The Davis Index for domestic HMS 1&2 (80:20) in South and North Taiwan, Tuesday, settled flat at TWD7,100/mt($241/mt) and TWD7,300/mt delivered mill, respectively. Yards kept offers unchanged from the previous week.
Feng Hsin Steel also kept its bids for domestic HMS 1&2 (80:20) flat at TWD7,100-7,200/mt delivered Taichung plant. The steelmaker’s base offers for rebar and billets too were unchanged at TWD14,200/mt and TWD12,700/mt ex-works, respectively.
Many mills canceled discounts on rebar base offers to pass on the input costs to end buyers.
In seaborne markets, US-origin containerized HMS 1&2 (80:20) offers were largely flat at $257-260/mt cfr Taiwan and the index for containerized US-origin HMS 1&2 (80:20) settled unchanged at $255/mt cfr Taiwan due to lack of trades.
Buyers were unwilling to raise bids for containerized scrap and looked to procure small bulk. But the increasing Japanese scrap prices kept trades at bay.
Japanese small bulk cargoes of HMS 1&2 (50:50) were offered at $270/mt cfr Taiwan with no trades heard. Offers for shredded in small bulk cargoes were at $305/mt cfr Taiwan.
The weekly Davis Index for HMS 1&2 (80:20) settled flat at VND7,000,000/mt ($302/mt) delivered South Vietnam, inclusive of taxes. An increase in pandemic cases in Vietnam has hurt the demand for finished steel for the last two months at the minimum.
Demand for HRCs in the export market, however, has been firm due to active purchases by Chinese buyers. Traders expect domestic scrap prices to be impacted once Formosa Ha Tinh blast furnace increases prices for finished steel domestic deliveries in August.
In China, Shagang Steel increased bids for domestic #2 HMS (6-10mm thickness) to CNY2,720/mt($283/mt). Offers for the grade were up by CNY65/mt del Jiangsu mill, inclusive of 13pc VAT. The weekly Davis Index for the grade settled at CNY2740/mt price, up by CNY45/mt.
The mill kept its rebar prices unchanged from a week ago for mid -August shipments. Prices for billets in the domestic market were at CNY3,440-3,450/mt ex-Tangshan mill on Tuesday.
The weekly Davis Index for domestic HMS 1&2 (80:20) inched up by THB200/mt to settle at THB8800/mt (276$/mt) delivered Rayong mill, inclusive of taxes. Domestic HMS 1&2 (80:20) was sold at the index price. In the seaborne markets, US-origin containerized HMS 1&2 (80:20) scrap traded at $235-240/mt cfr Laem Chabang this week.
Prices for domestic HMS 1&2 (80:20) rose amid a rise in imported scrap and iron ore prices. The weekly indexes for the grade settled at MYR1035/mt (247$/mt), up by MYR25/mt delivered western mills and at MYR1095/mt, delivered eastern mills, inclusive of taxes. Domestic ferrous scrap trades were limited with deals ranging between MYR1,000-1,100/mt. A shortage of domestic scrap is likely to drive prices upwards in mid-August.
($1= JPY106; TWD29.4; CNY6.9; THB31; MYR4.2 ; VND23,168; KRW1,183)