Asian buyers lowered imported ferrous scrap bids amid sluggish finished steel demand, cold weather and rising COVID-19 cases.
Higher finished steel prices are unviable for real estate and infrastructure projects, leading to slow demand, said steelmakers, adding that with the prices falling, steel demand might rising in February. Most Asian mills are expected to reduce their scrap purchase price this week in line with lower bids by Turkish buyers.
The Davis Index for containerized US-origin HMS 1&2 (80:20), Thursday, settled unchanged at $420/mt cfr Taiwan from the prior day as US-based exporters held offers at $420-430/mt. The index fell $15/mt from the prior week (Jan 14) as buyers lowered bids to $410-420/mt amid sluggish steel demand and in anticipation of a further fall.
Taiwanese buyers said most mills have adopted a wait-and-watch strategy until Chinese Lunar New Year holidays in February. They expect global ferrous scrap prices to fall amid cold weather and limited finished steel demand in most Asian countries. Few deals heard at $420-430/mt cfr this week.
The weekly Davis Indexes for containerized P&S 5ft, #1 HMS, shredded and #1 busheling fell by $16/mt, $14/mt, $22/mt and $15/mt $450/mt cfr, $426/mt cfr, $438/mt cfr and $456/mt cfr, respectively. Amid a fall in ferrous scrap offers from Japan and a drop in Turkish purchase prices, most mills have turned cautious. Mills are negotiating more deals for Japanese scrap after Hyundai Steel lowered bids on Wednesday.
Some Japanese HMS 1&2 (50:50) offers fell to $429-435/mt, $20/mt lower than last week, but no deals were confirmed due to a lack of firm bids in a falling market. Importers expect a rise in Chinese buying in February post Chinese New Year holidays. They expect scrap prices to remain low amid limited buying till February. Buyers are staying away from long transit containerised shipments and instead preferring small bulks from Japan or other Asian-origin scrap.
With Turkish buyers lowering prices by $38.87/mt in a week, traders are expecting ferrous scrap prices to fall globally. The Turkish Index for US-origin HMS 1&2 (80:20), Wednesday, fell by $11/mt from the prior day.
In bulk, no deals were heard from Taiwan. Offers for Japanese HS and busheling at $470/mt cfr, while bids at $450/mt cfr.
Sluggish finished steel demand both in the domestic and exports markets led to mills lowering bids further this week. Demand for steel imports from China and other Asian countries have declined amid harsh weather conditions and a resurgence of the pandemic.
In the containers market, the weekly index for US-origin HMS 1&2 (80:20) Thursday settled at $425/mt cfr Vietnam down by $15/mt from the prior week. Vietnamese mills reduced bids to $420/mt, while offers were firm at $430-435/mt. Traders expect offers to fall as mills are cautiously buying amid a fall in global ferrous scrap prices. Last week, few deals heard at $440/mt cfr.
The weekly index for P&S 5ft and shredded fell by $14/mt and $15/mt, respectively, to $445/mt cfr and $440/mt cfr, respectively, on Thursday, amid lower bids. Offers for P&S 5 ft in containers fell by $30-40/mt to $445-450/mt cfr from a week ago.
In bulk, Japanese #2 HMS offers fell by $10-20/mt from the prior week to $435-440 mt cfr but no deals heard. Russian 3A offered at $465/mt cfr, but buyers found the offer unviable in current market conditions.
Limited offers and deals heard this week as Vietnamese mills lowered bid even as supplies remained tight and freight prices continued to rise.
Indonesian mills remained quiet on slow domestic and falling imported ferrous scrap prices. Many importers and exporters are still waiting to register under the new scrap policy. Traders are negotiating deals from Hong Kong, Singapore and the US. Indonesian mills were more interested in shorter transit scrap this week.
Buyers expect ferrous scrap prices to drop until Lunar New Year. The weekly Davis Index for HMS 1&2 (80:20) fell $14/mt to $416/mt cfr Jakarta. Bids fell by $20-30/mt to $400-410/mt cfr Jakarta on Thursday.
The indexes for P&S 5ft and shredded fell by $12/mt at $439/mt cfr and $433/mt cfr Jakarta, respectively. Offers for Singapore-origin P&S 5ft heard at $460/mt cfr Jakarta, down by $20/mt from the prior week. The weekly Davis Index for #1 busheling fell by $10/mt at $450/mt cfr on low bids. Deals for UK origin P&S 5ft and HMS 1&2 (90:10) heard at $460/mt cfr Jakarta and $450/mt cfr, respectively, early this week.
Tokyo Steel cut ferrous scrap price for the second time in January. Effective Jan 22, Tokyo steel reduced ferrous scrap purchase prices by JPY2,000/mt ($9.6/mt) delivered Utsunomiya plant and JPY1000/mt for Kyushu, Tahara, Takamatsu and Okayama. The revised bids for #2 HMS are JPY42,000/mt ($415.5/mt) del Tahara, JPY40,500/mt del Okayama, JPY40,000/mt del plant Kyushu, JPY40,000/mt del Takamatsu, and JPY40,000/mt del plant Utsunomiya.
A Korean mill bought 45,000mt Japanese scrap on Thursday on fob basis. The deal consists 11,000mt busheling, 20,000 mt HS and 14,000 mt shredded traded at Hyundai Steel’s bid prices for Japanese scrap on Wednesday. Hyundai Steel reduced scrap purchase prices on Wednesday with bids for #2 HMS down by JPY2,000mt at JPY 39,500/MT fob. Bid for HMS 1&2 (50:50) revised to JPY40,000/MT fob, HS at JPY 44,000/MT fob, shredded at JPY44,000/MT fob and busheling at JPY45,000/MT fob.