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Ferrous market update July 13-17

Turkey

  • The daily Davis Index for Turkish imports of US-origin HMS 1&2 (80:20) slid by $0.05/mt on Friday on reports of sales from the Baltic region.
  • Turkish mills opted for ferrous scrap bookings from the Baltic region after suppliers from that region accepted prices at around $260/mt cfr, while US exporters are still targeting $265/mt cfr.
  • Turkey’s weekly Davis Indexes for DKP scrap and extra grade scrap were flat on Monday as inflow volumes remained adequate for Turkish mills’ needs resulting in a demand-supply balance.
  • Daily domestic rebar spot prices increased by TRY30-40/mt ex-works, including 18pc VAT, on Friday amid active sales, while exported rebar prices increased to the upper range of $415-420/mt fob on Friday on active interest from South East Asian markets.
  • In the domestic market, Turkish mills raised purchase prices for shipbreaking scrap by $5/mt to $255/mt delivered on Friday.

 

Europe

  • The weekly Davis Index for HMS 1&2 (75:25) in the ARAG region rose by €3/mt delivered dockside on Tuesday amid positive export market sentiment.
  • Ferrous scrap suppliers in the Netherlands and Belgium continued to increase collection prices in anticipation of deals at higher prices as export demand, especially from Turkey, improved.
  • Offers from Europe to Turkey were scarce earlier in the week as some exporters had already sold their volumes to alternative outlets such as Egypt in the first half of July.  (€1 = $1.14)

 

CIS

  • The weekly Davis Index for HMS 1&2 (80:20) decreased by $12/mt fob Baltic Sea and by $3/mt fob Black Sea region amid higher freight rates.
  • Russian suppliers’ fob prices decreased significantly as freight rates increased to a minimum of $25/mt for 30,000mt-cargoes, which is why most of exporters insisted on higher cfr prices to Turkey. 
  • Collection prices trended down in Russia with the weekly Davis Index for HMS 1&2 (80:20) sliding by RUB350/mt ($5/mt) delivered St Petersburg dock and by RBU150/mt delivered to Rostov-on-Don dock on Monday.  ($1 = RUB70.57)

 

UK

  • The monthly UK 1&2 and 3B ferrous scrap consumer indices decreased by £2/mt following the conclusion of mill-yard negotiations in July.
  • Major UK-based smelters had initially opened negotiations with bids of £10-15/mt down over last month’s purchases. However, they were soon compelled to revise those numbers lower to compete with unexpected demand and price strength in the export market.
  • Davis Index’s monthly UK OA, 4A/4C, 8A/8B, and 12A/C/D ferrous scrap consumer indices declined by £5-10/mt over the same period.
  • The weekly north and south UK HMS 1&2 (80:20) ferrous scrap indices rebounded by £7/mt ($9/mt) and £8/mt, respectively, on Tuesday.
  • Turkish mills were relatively quiet during the latest negotiations, but UK-based ferrous scrap suppliers noted a flurry of activity from Indian and Pakistani traders in the containerized scrap market. This recent unanticipated demand from South Asian-based buyers has consequently driven up prices for feedstock, spilling over into the complementary local bulk markets. (£1 = $1.25)

 

Germany 

  • Davis Index’s monthly German ferrous consumer scrap indices declined by €2-16/mt ($3-25/mt), depending on grade and location, following the conclusion of mill-yard negotiations in July.
  • East Germany witnessed the heaviest declines of €10-16/mt delivered mill, depending on grade as increased ferrous scrap availability in neighboring Poland resulted in intensified competition with local dealers to supply to East German steel mills.
  • In southern Germany, price falls were more muted at €2-8/mt delivered as a decline in Italian ferrous scrap collection and generation rates created a robust appetite for German imports.
  • North German ferrous scrap prices declined by €5-10/mt, with domestic consumption not recovering sufficiently to support the market, while benchmarks have also partially tracked developments at EU docks selling on to Turkey. (€1 = $ 1.14)

 

Spain

  • The weekly northern Spain HMS 1&2 (80:20) and shredded ferrous scrap small bulk Davis Indexes continued to move up, rising by €2/mt on Friday on improving demand from Turkey. (€1 = $ 1.14)

 

US dockside

  • US East Coast dock collection prices for ferrous scrap increased by $1-4/gt for some grades and dock locations while others remained unchanged. Prices for HMS 1&2 (80:20) have remained comparatively flat lingering close to $200/gt, barring soft movements since June 30. 
  • In Houston, dock collection prices dropped by $3/gt as Houston docks are paying about $10-15/gt above the East coast.
  • US export demand is elevating as fresh sales to Turkey were heard in the market on Tuesday and buyers have actively booked US scrap within the past week. US offers for HMS 1&2 (80:20) were at around $260/mt cfr Turkey on Tuesday. Offers matched this level on June 9 when East Coast docks were paying $215-220/gt for the grade, which leaves room for upward price movements.
  • In Boston, the weekly Davis Index for export yard HMS 1&2 (80:20) increased by $2/gt while P&S 5ft and shredder feed remained unchanged.
  • The weekly Davis Index for export yard buying prices in New York for HMS 1&2 (80:20) rose by $4/gt while only increasing by $2/gt in Philadelphia.
  • The weekly Davis Indexes in Houston decreased by $3/gt for HMS 1&2 (80:20), P&S 5ft, and shredder feed. Houston dock prices have remained above the East Coast since June 16 as the focus has been on domestic trading however, this dock location predicted on July 7 that prices could lower slightly this week.
  • US West Coast ferrous scrap dock prices increased on Tuesday after bottoming out last week, amid higher export demand and strong northwestern mill prices that traded sideways during the early July trading week. 
  • The sideways pricing makes mills pricing more attractive than docks, thereby, forcing the latter to increase prices to compete for inventories. A sharp decline of $15-20/gt was attempted last week but docks returned to sellers with higher offers.
  • Sellers are reporting negotiations for late August and September bulk shipments into the Asian markets. 
  • The weekly Davis Indexes in Portland increased for HMS 1&2 (80:20) and P&S 5ft by $8/gt while shredder feed rose by $7/gt. 
  • In Los Angeles, the weekly Davis Indexes increased across all grades. No official price increases were announced, after several downward adjustments into early July, but indexes began moving upwards on quiet deals. Moreover, Los Angeles indexes were substantially lower through the past several months compared with San Francisco and Portland. 
  • The weekly Davis Indexes in San Francisco increased slightly across all grades with HMS 1&2 rising by $3/gt, and P&S 5ft and shredder feed inching up by $1/gt.

 

US containers

  • US containerized ferrous scrap indexes increased on the West Coast but were mostly rangebound on the East Coast on Thursday.
  • The weekly Davis Index in New York for #1 busheling and HMS 1&2 (80:20) by $1/mt and dropped for P&S 5ft by $2/mt. Shredded increased by $3/mt.
  • Sellers and buyers report a relatively unchanged export market off the East Coast that encountered active inquiries and buys from Asia. Scrap flows are considered adequate against demand in this region.
  • The West Coast, on the other hand, benefited from tighter scrap supply in the region and the effect from China not exporting as much steel into neighboring markets. The country preferred instead, to import the material from Taiwan, Vietnam, India, and Pakistan. The resulting demand shift is expected to support mills throughout Asia that are struggling to improve capacity utilization. 
  • Several bulk negotiations for South Korea and Taiwan have been postponed in the week making containers from the US more attractive now. 
  • Rising Japanese scrap export offers are also supporting US container export prices to Asia. 
  • The weekly Davis Indexes for HMS 1&2 (80:20) rose by $12/mt in Los Angeles, increased by $10/mt to in San Francisco, and climbed up by $11/mt in Seattle. The other containerized grades also increased in tandem throughout the three regions. 

 

Mexico

  • Ferrous scrap prices declined across all the three Mexican regions this week due to low demand from mills.
  • Market participants noted that prices will maintain their downward trend as Mexican and US mills continue to reduce their buying prices because of weak demand. Mexican steel mills have decreased their buying prices by around $200/mt over the past three weeks.
  • In Northern Mexico, the weekly Davis Index for HMS 1&2 (80:20) remained unchanged delivered Mexico consumer on Friday. The index for #1 busheling fell by MXN150/mt and dropped for P&S 5ft by MXN50/mt.
  • The weekly Davis Index in Bajío decreased by MXN50/mt delivered Mexico consumer for HMS 1&2 (80:20). The index for #1 busheling was unchanged while shredded and P&S 5 ft fell by MXN100/mt and MXN 50/mt, respectively.
  • In Central Mexico, the Davis Index for HMS 1&2 (80:20) fell by MXN50/mt. The index for #1 busheling in the region decreased by MXN25/mt but remained unchanged for P&S 5ft. ($1= MXN22.56)

 

Japan  

  • Japan’s monthly Kansai scrap export tender concluded on July 14 with average winning bids higher by JPY2,000/mt than market levels. At the tender, 5,000mt of #2 HMS scrap was booked JPY2,900/mt below the previous month. 
  • Tokyo Steel held finished steel prices for August shipments to let the market absorb the previous hike while it undertook scheduled maintenance. The steelmakers’ mill would be under maintenance on different dates for a span of 4-10 days from July end to mid-August. Tokyo Steel hiked ferrous scrap purchase prices by JPY500/mt at Utsunomiya works, but left prices unchanged at other works.
  • The weekly indexes for #2 HMS, HS, and Busheling scrap moved up by JPY1,000/mt. 
  • The Davis Index for HMS 1&2 (50:50) cfr Vietnam, rose by $7/mt from the prior week. ($1=JPY107.1)

 

South Korea  

  • The weekly Davis Index for containerized HMS 1&2 (80:20) cfr South Korea dropped by $1/mt. The indexes for #1 busheling rose by $2/mt and shredded increased by $1/mt. Bids for shredded were low with no trades confirmed.
  • Korean mills continue to struggle with weak steel demand and lower prices in the domestic as well as export markets. 
  • Steelmakers Dongkuk, SeAH, YK, Daehan, and Hyundai Steel lowered their domestic scrap purchase prices by KRW5,000-10,000/mt del mills for the fourth consecutive week. 
  • Hyundai Steel’s bids for Japanese HS scrap (equivalent to P&S, shindachi, and shredded grades) at JPY24,500/mt ($229/mt) fob Japan, down by JPY500/mt from the prior week.

 

Taiwan  

  • Imported scrap prices in Taiwan rose by $2/mt on Wednesday on the back of bullish offers.
  • Trades for imported scrap with shorter delivery time were subdued as most Taiwanese mills exercised caution amid the ongoing typhoon season. These shipments are usually booked from Australia and Hong Kong.
  • The daily Davis Index for containerized US-origin HMS 1&2 (80:20) rose by $1/mt cfr Taiwan on Friday and by $10/mt from the prior week. 
  • The weekly Davis Index for containerized shredded rose by $9/mt from last Thursday.
  • In small bulk markets, Japanese HMS 1&2 (50:50) was offered up by $8/mt from the prior week.
  • Domestic scrap prices in Taiwan remained flat this week. Feng Hsin Steel kept domestic scrap, billet, and rebar prices unchanged amid a seasonal lull in steel demand.
  • The weekly Davis Index for domestic HMS 1&2 (80:20) del mill settled flat on Tuesday in South Taiwan. A few mills offered discounts on listed prices to boost demand.($1=NTD29.49) 

 

China

  • Shagang Steel raised bids for domestic #2 HMS (6-10mm thickness) on Tuesday by CNY30/mt del Jiangsu mill. The weekly Davis Index for domestic HMS 1&2 (80:20) delivered to mill in eastern China rose by CNY50/mt from the prior week on bullish domestic steel demand. 
  • Strong recovery in finished steel futures and iron ore import prices led to a sharp rise in steel prices despite heavy rains and floods in the northern region. 
  • In the domestic market, prices for billet rose by CNY70-100/mt from the last week ex-Tangshan mill.
  • Baosteel increased its domestic finished flat steel product prices for the third successive month. The prices for August shipments for HR, CR, and plates rose by CNY100/mt ex-works amid strong domestic steel demand in the country. ($1=CNY7)

 

Vietnam 

  • In small bulk markets, Japanese HMS 1&2 (50:50) and HS were offered up by $10/mt from the prior week.
  • In containers markets, the weekly index for shredded rose by $9/mt cfr Haiphong. US exporters were unwilling to match bids of Vietnamese mills. The index for P&S 5ft rose by $2/mt cfr with few deals heard at the index price. 
  • Formosa Steel is expected to raise offers for September HRC shipments by $20/mt from current market levels amid a stable outlook.
  • The Davis Index for HMS 1&2 (80:20) delivered South Vietnam, dropped by VND50,000/mt from the prior week. ($1=VND23,195.3) 

 

Indonesia

  • The demand for finished steel is weak in Indonesia due to a slowdown in the construction sector. Ferrous scrap prices, however, rose on global cues.
  • Few trades in containers for #1 busheling from the US were heard at $280/mt cfr Jakarta with the index for the scrap grade falling by $2/mt. Except busheling, all grades of ferrous scrap rose this week fueled by higher offers.
  • New regulations mandating supplier yards to register with the Indonesian embassy continued to reduce scrap offers.

 

Thailand

  • The weekly Davis Index for domestic HMS 1&2 (80:20) dropped by THB100/mt delivered Rayong. Major steelmakers stayed away from new bookings amid weak steel demand in the domestic market. ($1=THB31.70).

 

Malaysia 

  • The weekly Davis Indexes for domestic HMS 1&2 (80:20) dropped by MYR10/mt delivered for both western and eastern mills from the prior week.  ($1=MYR4.26)

  

India

  • Imported ferrous scrap prices in India are expected to rise as domestic scrap generation has taken a hit. 
  • The daily Davis Index for containerized shredded rose by $4/mt from the prior week. Suppliers from the US and UK increased offers by $5-10/mt rejecting low bids placed early in the week. 
  • The index for US-origin HMS 1&2 (80:20) rose by $5/mt from the prior week. Brazilian and West African HMS 1&2 (80:20) in containers traded at $250-255/mt cfr Nhava Sheva. UK-origin HMS 1&2 (80:20) traded at $255-260/mt cfr Nhava Sheva. 
  • Indian mills actively exported billets. A mill exported billet at $10/mt higher than the prior week. ($1=Rs74.93)
  • Prices for HMS 1&2(80:20) in Mandi Gobindgarh on Friday rose by Rs100-200/mt del mills from the prior week as a shortage of scrap in the local market helped traders increase offers.
  • The price for HMS 1&2 (80:20) declined by Rs50/mt del Mumbai and rose by Rs700/mt del Raipur.

 

Pakistan  

  • Falling ferrous scrap inventories and tightened supply gave imported ferrous scrap prices a further lift in Pakistan. The Davis Index for US-origin containerized shredded rose by $5/mt. 
  • UAE-origin super scrap or a mix of #1 HMS and P&S traded at $10-15/mt higher than prior week depending on the quality. 
  • Domestic steel prices in Pakistan dropped early in the week due to weak demand but recovered mid-week driven by an increase in imported scrap prices. 
  • The weekly Davis Index for commercial Bala billet rose by PKR250/mt from the prior week. 
  • The Davis Index for G-60 rebar settled unchanged from a week ago. In Punjab, a glut of G-60 rebar in the local market dropped prices by PKR1,000/mt ex-works. 
  • Domestic ferrous scrap prices in Pakistan increased following higher imported scrap prices. The weekly index for Art Pure Q equivalent to shredded delivered Lahore mill remained unchanged from the prior week. ($1=PKR167.45)

 

Bangladesh

  • Bangladeshi mills booked fewer containerized scrap materials this week citing high prices.
  • In the bulk market, a US West Coast supplier sold 32,000mt full shredded at $270-275/mt cfr Chattogram.
  • The daily index for containerized shredded was up by $3/mt from the prior week with trades for containerized shredded from the UK at $295/mt cfr Chattogram early in the week. 
  • US-origin HMS 1&2 (80:20) prices rose by $10/mt from a week ago. A few trades were reported at $275-280/mt cfr Chattogram.
  • Domestic billet and rebar prices in Bangladesh dropped by BDT500/mt from the prior week amid low end-user demand. Mills are still ramping up their production and preferred lower-priced domestic scrap over imported scrap. Domestic ferrous scrap prices continued their downtrend due to oversupply and competitive sponge iron offers from India. ($1=BDT84.75)

 

Metallics

 

CIS 

  • The weekly Davis Index for basic pig iron fob Black Sea rose by $4/mt this week on reports of new sales to China. 
  • Two Russian suppliers closed deals at $353-354/mt cfr recently, up by $6-7/mt from previous sales to China.
  • The gap between bids at $325/mt cfr and offers at $340/mt cfr prevented buyers and suppliers from sealing a deal in Italy this week despite ongoing negotiations and resulted in the weekly index for CIS pig iron to Italy rising at a slightly lower pace by $5/mt.

 

US

  • The weekly Davis Index for basic pig iron (BPI) increased by $11/mt f cfr New Orleans on Thursday amid limited allocation of the material and sales to alternate outlets like China.
  • CIS suppliers decided to raise offers for pig iron to the USA to $340-350/mt cfr, while the most recent deal was closed at $330/mt cfr for Ukrainian material around a week ago.
  • US pig iron buyers are being careful with their purchases. However, they have little chance to achieve lower prices, despite a decrease of domestic ferrous scrap and steel product prices in July, as demand for the material from countries like China remains high.

 

India

  • Sponge iron prices in Mumbai increased by Rs300/mt on higher input costs. 
  • The biweekly index for sponge iron in Durgapur increased by Rs1100/mt from Tuesday as mills preferred sponge iron over scrap. The biweekly index for sponge iron rose by Rs550/mt del Raipur.
  • Rising COVID-19 cases are creating concerns for mill owners as few cities are already under lockdown, which expected to further dampen demand for steel.

 

Finished steel

  • The daily index for billet declined by Rs250/ mt on Friday ex-works Raipur in tandem with a fall in rebar prices. 
  • Manufacturers are confident domestic steel prices are unlikely to move down given the higher iron ore prices in the global market.
  • In Mandi Gobindgarh, the daily index for ingot decreased by Rs150/mt ex-works mirroring scrap price movement.

 

Shipbreaking 

  • Weekly shipbreaking scrap prices increased by Rs600-1,000/mt on Friday. Demand from shipbreaking scrap has gradually picked up as mills in North India and Gujarat resumed operations.
  • Prices of 14Ani on Friday rose by Rs600-700/mt from last Friday. Prices for Melting and HMS attachments rose by Rs300/mt ex-Alang. Demand for plates also gradually increased, with 5kg plates prices rising by Rs600/mt as compared to Friday.

Ship buyers expect scrapping volume of ships to increase in 2020 compared to last year’s 20.9mn dwt. Approximately 43 vessels have been beached post-COVID-19 and many more are arriving, inventories in hand have reached to pre-pandemic levels of 443,600mt at yards. Around 160,500mt is pre-booked and expected at Alang for green recycling.

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