Ferrous Market Update 11/13/2020
- The daily Davis Index for Turkish imports of US-origin HMS 1&2 (80:20) rose by $6.65/mt on Thursday, as offers continue to rise.
- A slate of US sales to Brazil, Mexico and Peru over the past three weeks has reduced the availability of scrap, with shredded scrap the tightest grade in supply.
- European offers jumped to $310/mt cfr Turkey on Friday for heavy melt, with US suppliers socializing ideas of $315-320/mt cfr. This is in response to an overnight increase in rebar export offers which rose by $10/mt cfr to $500/mt fob. Turkish mills have booked over a dozen cargo sales of steel products to Southeast Asia, Latin America and USA at prices of $470-485/mt fob.
- A small parcel of Russian heavy melt was booked at $310/mt cfr on Friday. Scrap suppliers are extremely bullish on prices which has led to a freeze in negotiations as buyers have chosen to wait a few days in an attempt to cool sentiment.
- Information of a deal from Europe to Turkey was released to the market on Friday at a composite price of $303/mt which many believed was booked at least a week ago.
- The weekly Davis Index for DKP scrap (equivalent to auto bundles) in Turkey went up by TRY82/mt ($10/mt) delivered on Monday as most mills raised their purchase prices on Nov 3-4 amid currency fluctuations and higher prices for imported material.
- Purchase prices for shipbreaking scrap in Izmir remained unchanged. ($1 = TRY8.07)
- The weekly Davis Indexes for HMS 1&2 (80:20) or A3 scrap in the Baltic Sea and Black Sea regions of Russia both remained flat on Monday.
- Despite active trading in the Russian export ferrous scrap market, prices changes were negligible. A supplier from St Petersburg sold HMS 1&2 (80:20) at $293/mt cfr Turkey in early November, while another exporter closed a deal for the same material at $292.50/mt cfr Turkey at the end of October.
- A scrap collector from Murmansk and Arkhangelsk reached an agreement with a Turkish mill at $304/mt cfr for HMS 1&2 (95:5). Another supplier from this region of Russia was heard to sell similar grade to Turkey at a higher price, but further details were not available at the time of publication.
- No transactions were reported from Rostov-on-Don last week amid limited availability of the material from this region.
- Collection prices diverged in the Russian market. The weekly Davis Index for HMS 1&2 (80:20) or A3 scrap went up by RUB350/mt ($5/mt) delivered St Petersburg dock on Monday and fell by RUB200/mt ($3/mt) delivered Rostov-on-Don dock. ($1 = RUB76.22)
- The weekly Davis Index for HMS 1&2 (75:25) in the ARAG region rose by €4/mt ($5/mt) delivered dockside on Tuesday amid positive export market sentiment.
- Ferrous scrap suppliers in the Netherlands and Belgium increased collection prices after achieving higher rates in the most recent deals in Turkey. Last week, European exporters sold several cargoes to different Turkish mills, including HMS 1&2 (80:20) at $289-291/mt cfr. This week, their targets moved to $295/mt cfr and higher for this grade. European scrap collectors are bullish amid limited availability of the material and slow collection.
- The weekly Davis Indexes for HMS 1 and bonus scrap in the ARAG region both also rose by €4/mt ($5/mt) delivered dockside, on Tuesday. (€1 = $1.18)
Davis Index’s weekly north and south UK HMS 1&2 (80:20) ferrous scrap indices climbed by £7-8/mt ($9-11/mt) delivered dockside on Tuesday.
UK dockside ferrous scrap purchase prices played catch up with developments witnessed in major seaborne trade routes over the past month.
- UK dockside rates had remained little changed though Turkish HMS 1&2 (80:20) ferrous scrap import prices have climbed almost $14/mt over the past four weeks on Nov 9. At the same time, Davis Index has heard anecdotal evidence that the imposition of a second month-long lockdown since Nov 5 has materially slowed inflows of ferrous scrap into local yards.
- The weekly indexes for north and south UK OA (Plate & Structural) both increased by £7/mt delivered dockside on Nov 10.
- Davis’ north and south UK 5A/5C (frag feed) ferrous scrap indexes jumped by £8/mt delivered dockside, respectively, over the past week. (£1 = $1.32)
- Davis Index’s monthly UK 1&2, 3B and OA ferrous scrap consumer indices climbed by £3-5/mt ($4-7/mt) following the conclusion of mill-yard negotiations in November.
- British steel producers opened negotiations early last week with bids at £5/mt higher compared with last month’s levels to match impending hikes in the UK dockside markets.
- Some local ferrous scrap merchants almost immediately pushed back in anticipation of being able to drive domestic mills closer to their offer prices.
- That said, a large UK ferrous scrap processor noted that some of the country’s major smelters were relatively well-stocked and unlikely to require significant volumes this month. As a result, domestic steel producers held firm and stood by their initial opening bids of £5/mt for November transactions.
- Davis’ monthly UK 4A/4C and 8A/8B ferrous scrap consumer indices both increased by £5/mt, while 12A/C increased by £3/mt delivered mill over the same period. (£1 = $1.32)
- Davis Index’ weekly northern Spain HMS 1&2 and shredded small bulk ferrous scrap indices increased €4/mt ($5/mt) over the past week, on Nov 13.
- Shortsea bulk ferrous scrap suppliers to Spain were able to push through modest prices hikes of €4/mt over the past week, though not as much as they would have hoped to achieve, given strong increases at UK docks and on major seaborne trade routes.
- For example, Turkish HMS 1&2 (80:20) ferrous scrap import prices have jumped almost $13/mt over the past week while UK dockside HMS 1&2 dockside purchase prices have lifted £7-8/mt ($9-11/mt) over the same period.
- Spanish mills have been able to withstand the pressure of suppliers trying to push through more robust increases, as steel output and ferrous scrap consumption rates remain relatively subdued; creating a plethora of local supply availability to fall back on.
- As a result, shortsea ferrous scrap suppliers have looked to allocate more cargoes towards alternative, well-established routes, such as transshipment to Turkey through northern Europe, given that they are able to secure higher prices.
- The indices UK small bulk ferrous scrap HMS 1&2 (80:20) and shredded climbed €6/mt compared with the prior week, on Nov 13. (€1 = $1.18), (£1 = $1.31)
- US East Coast and Houston dock collection prices for ferrous scrap improved this week amid continuing export activity, limited material availability, and firming domestic prices.
- Domestic scrap tags largely remained flat during the recently concluded November trade. However, upward price movements, some considerably high, were achieved on various grades in certain regions as some mills had healthy buying programs.
- Steel mills in Turkey have booked ample amounts of material in the past week and continue looking to fulfil remaining tonnage needs for December. Mill order books are healthy in Turkey however scrap supply is tightening which is causing offer prices to rise.
- Offer levels from the US to Turkey on Tuesday are near $300/mt cfr for HMS 1&2 (80:20). This compares to $292-295/mt cfr, which was the price point for the grade on Nov 3.
- Dockside prices range between $230-250/gt for HMS 1&2 (80:20), with most of the transactions around $240/gt minimum as bulk exporters have steadily raised prices to keep pace with fulfilling prior and new bookings.
- In Boston, the weekly Davis Index for export yard HMS 1&2 (80:20) climbed by $8/gt delivered Boston dock. P&S 5ft moved up by $7/gt delivered and Shredder feed also increased by $7/gt delivered.
- The weekly Davis Index for export yard buying prices in New York climbed by $9/gt delivered for HMS 1&2 (80:20) and by $8/gt delivered dock for P&S 5ft. The index for Shredder feed rose by $7/gt delivered.
- In Philadelphia, the Davis index for export yard collection prices of HMS 1&2 (80:20) increased by $8/gt and P&S 5ft rose by $9/gt delivered Philadelphia dock. The index for Shredder feed climbed by $7/gt delivered.
- In Houston, the weekly Davis Index climbed by $12/gt for HMS 1&2 (80:20). P&S 5ft moved up by $14/gt delivered Houston dock. The Shredder feed index increased by $6/gt delivered.
- US West Coast ferrous scrap dock prices rose on strong export demand and tight scrap inventories. Portland and San Francisco encountered substantial price increases. Los Angeles docks have yet to announce an official price rise, but dealers are paying more in quiet deals to attract tonnage.
- Turkish imported scrap prices that have now reached $305/mt cfr on HMS 1&2 (80:20), up $18/mt from an Oct 13 deal, are supporting a strong global scrap pricing sentiment for the remainder of the year. Market participants believe that bulk and container prices could trend sideways for the remainder of the year after rising for another week or two. The trend is attributed to buyer resistance to higher prices along with year-end inventory planning and realignment by buying companies due to the uncertainty in their own domestic markets.
- Limited deals are being heard at higher prices this week, especially in bulk, although the shortage of ferrous scrap and high capacity utilization at mills may buoy activity.
- South Korean domestic scrap prices increased amid rising imported scrap offers and expectations of more production of semi-finished and finished steel in December. As raw materials cost increases, mills are being pressured into raising finished steel prices. Given the still developing recovery post-COVID and fears of a second wave that would slow down economies, mills are uncertain about the market’s strength in Q1 2021.
- Bangladesh and Thailand are facing the headwind of slow domestic demand. On the other hand, Malaysian mills prefer paying higher domestic scrap prices instead of scrap imports due to economic uncertainty and a depreciating currency. India’s demand will continue to remain strong after the short-term slowdown due to the Diwali festival that begins on Nov 13.
- Export scrap prices in Japan, Russia, UAE, EU, and Latin America are firming up on active demand from Asian buyers. US scrap exporters are holding firm pricing on tight scrap flows and inventories along with expectations of local scrap price increases in December and January.
- Mexican mills are also expected to continue seeking tonnage throughout the West Coast, Southwest, and Southern US regions due to increased production schedules that have returned to pre-pandemic utilization rates in some cases.
- The weekly Davis Indexes in Portland rose after two consecutive flat weeks with HMS 1&2 (80:20) increasing by $16/gt, P&S 5ft climbing by $10/gt, and Shredder feed rising by $2/gt.
- In San Francisco, the weekly indexes also jumped after two quiet weeks with HMS 1&2 (80:20) increasing by $27/gt, P&S 5ft climbing by $20/gt, and Shredder feed rising by $19/gt.
- The weekly Davis Indexes in Los Angeles increased over the week following an unchanged week as docks sought to attract tonnage. The indexes rose for HMS 1&2 (80:20) by $5/gt, P&S 5ft increased by $3/gt delivered dockside, and Shredder feed increased by $8/gt delivered.
- In Los Angeles, the containerized market strengthened over the past week as HMS 1&2 (80:20) prices increased from $265/mt fas last Thursday to transactions now being heard up $5-10/mt to $270-275/mt fas on Tuesday.
- US containerized ferrous scrap indices climbed for the fifth consecutive week on strong demand from Asia. The Davis index for HMS 1&2 (80:20) is up $27/mt at the Los Angeles port, from Oct 1. The New York area HMS 1&2 (80:20) index increased by $26/mt on Thursday, from Oct 1.
- Finished steel prices throughout Asia continue climbing on higher raw material prices. Buyers remained wary of higher buying prices, worried that domestic demand may not materialize as expected in early January.
- Market participants reported expectations of higher US domestic scrap prices in the December and January trading weeks, tight feedstock flows, and low scrap inventories which support the higher export prices. Docks have also recently increased scrap prices on the expectation of higher bulk and container prices. US docks are heard to be paying premiums above list prices for sufficient tonnage, especially, structural steel that decreased in availability, due to lesser demolition projects.
- Higher import scrap prices to Turkish mills and good outlook on Turkish finished steel supporting global sentiment. Turkish HRC is heard to be getting placed in East Asian Markets. South Korea and Japan have also become top suppliers to Turkey of HRC material in recent months, showing the return of circular demand and an active worldwide steel demand recovery.
- Alternatives to US-sourced scrap such as Japan, EU, UK, Latin America, and Russia have also increased prices. Japanese domestic and export prices increased on Wednesday after the results from the Kanto Tetsugen scrap auction. Tokyo domestic scrap prices increased by $14/mt as export bids in the auction increased by $21/mt. Japanese export yards are now offering HMS 1&2 (50:50) at prices up by $15-20/mt, compared to a week ago.
- Vietnamese buyers shifted interest for bulk buys and are expected to continue making inquiries for containerized scrap this week at higher prices. Given the need for imported scrap to meet production objectives, buyers are expected to rise bid prices given as more alternatives become available to US sellers.
- Buyers from Indian, Pakistan, and Bangladesh are expected to continue with demand despite higher prices. The countries are facing historically high import prices and are balancing them with concerns about domestic finished steel performance. In the case of Pakistan, its currency appreciation could support imports. Some Indian buyers are on pause due to the Diwali festival but expectations of the economic recovery gaining momentum upon return from the holiday and into Q1 2021 have most market participants expecting the same to firm containerized prices through the end of the year. The Indian government has recently announced further stimulus efforts that will support steel demand.
- Market participants report higher freight costs to Asia. Freight prices to Taiwan are up $5-7/mt over last month. Market participants state that the issue is not only tight scrap inventories but also the availability of containers through January.
- The weekly Davis Indexes in New York rose across all grades for the fourth consecutive week. The indexes for #1 busheling and HMS 1&2 (80:20) rose by $8/mt.
- The Davis Indexes in Los Angeles climbed for the fifth consecutive week with #1 busheling and shredded jumping by $14/mt and HMS 1&2 (80:20) up by $9/mt fas.
- The Davis Indexes in San Francisco rose for #1 busheling by $9/mt as HMS 1&2 (80:20) increased by $10/mt while Seattle HMS 1&2 (80:20) rose by $5/mt.
- Domestic ferrous scrap trading for November concluded for the most part by Friday with some transactions lingering into Monday.
- Markets by and large transacted at unchanged prices from October settled prices, however, prices increased in some regions with limited material and strong mill demand. On the other hand, mills in areas such as Chicago and Cleveland were lagging on buy volumes as well as trending at lower price levels than Southeastern regions.
- Unchanged prices were agreeable for many sellers who still owe tons on October orders, but sideways prices were not enough to move all tonnage requirements for mills. Thus, prices ticked up gradually especially for P&S 5ft and #1 Busheling in or near the Chicago area. According to a dealer, a mill in the area had not purchased for several months and now purchased about 70,000gt, thereby, supporting higher prices in Monday’s deals.
- US mill utilization rates are increasing, currently at 71.1pc according to the American Iron and Steel Institute, while order books and lead times are increasing. HRC prices continue rising and are presently at $640-$700/nt, ($705-$772/mt) fob mill with lead times at eight weeks, although buyers are heard pushing back on the higher prices. CRC prices are heard in the range of $840-$880/nt ($926-$970/mt or) fob mill. This growth is expected to continue as markets already predict firm prices for domestic finishes steel and competing import options through the end of the year with strong capacity utilization into January.
- In Cleveland, prime grades such as #1 bundles and #1 busheling increased by $20/gt while cut grades such as HMS 1&2 (80:20) remained sideways and shredded climbed by $10/gt delivered. The Davis Index for #1 busheling increased by $20/gt delivered while the index for HMS 1&2 (80:20) rose by $1/gt delivered.
- In Chicago, the demand for secondary grades was healthy and about 40-50pc of tonnage was sold at flat prices while the remainder of P&S 5ft and #1 busheling sold at up $10-20/gt. Surrounding regions moved P&S 5ft into Chicago due to high demand and limited supply in the area’s mills.
- Pittsburgh, Detroit, Cincinnati, Philadelphia, and Buffalo markets settled more quickly late last week, at prices that were sideways or ticked up or down across different grades. Prime grades rose by about $10/gt in Pittsburgh, where the index for #1 busheling climbed by $13/gt while the index for HMS 1&2 (80:20) continued unchanged. In Detroit, the Davis Index for #1 busheling increased by $5/gt delivered while HMS 1&2 (80:20) and P&S 5ft were flat.
- The Texas and Southeastern regions trended mostly sideways with a few increases on #1 busheling as the Arkansas market increased by $5/gt and the Houston index on the grade increased by $2/gt. Houston’s and Arkansas’ HMS 1&2 (80:20) and P&S 5ft indexes continued unchanged. In Birmingham, the P&S 5ft index increased by $2/gt as HMS 1&2 (80:20) trended flat.
- Opinions for December ferrous trade range from sideways to up $30/gt against November settled prices. Market participants warn that the discrepancy in expectations is due to fewer working days next month, uncertainty regarding mill demand, and the influence of year-end inventory restrictions.
- Demand could stay unchanged from November, resulting in higher prices in December on tight feedstock supply, due to fewer receipt and processing days and lighter feedstock in winter. Some market participants, though, believe that demand volumes may be lower given the adequate buy in November and end of year inventory management transferring most of the uptick expected in the next 60 days to the January trading week. Others believe mill demands will be sufficient for an increase of $10/gt on HMS 1&2 (80:20), which trended flat across most regions in November trading.
- Mexico’s domestic ferrous scrap prices increased across most grades on continued demand as industries return to pre-pandemic operating levels. The automotive and manufacturing sectors are recovering in tandem with US’ improved economic indicators.
- Mexican mills favor domestic supplies but have been actively importing scrap from the US’ West Coast, Southwest and Southern regions, especially in October. A falling Mexican peso against the US dollar may lead to a slow down in scrap imports. Simultaneously, domestic mills increased finished steel exports, sold in US dollar, giving the mills an opportunity to hedge scrap imports against their sales. In a weekly comparison, the peso noted a minor gain, and currently is at MXN20.41 per dollar against MXN20.55 last Friday.
- Mills purchased HMS in mixed packages and P&S 5ft at $265-270/mt fob and $270-280/mt fob, respectively in the week. Deals were heard in Texas and New Mexico. Containers are actively being purchased from the West Coast with HMS 1&2 (80:20) currently priced at $270-275/mt fas, headed upward on export demand.
- In North Mexico, the weekly Davis Indices for HMS 1&2 (80:20) rose by MXN67/mt ($3.28/mt), P&S 5ft increased by MXN91/mt delivered. Shredded went up by MXN167/mt delivered Mexico consumer. The index for #1 busheling inclined steeply by MXN483/mt delivered. Machine shop turnings were less affected and only increased by MXN50/mt.
- The weekly Davis Indexes in Bajío climbed across the grades with #1 busheling increasing only MXN13/mt delivered as the other grades encountered higher jumps. The index for machine shop turnings increased by MXN150/mt delivered and HMS 1&2 (80:20) climbed by MXN213/mt delivered while P&S 5ft rose by MXN200/mt delivered. Shredded rose by MXN163/mt delivered Mexico consumer.
- In Central Mexico, the weekly indices were up by MXN100/mt across grades. Some consumers reported an increase of MXN200/mt in some transactions on shortage of scrap and increased demand. ($1=MXN20.40)
- Domestic and export ferrous scrap prices in Japan trended up this week. Tokyo Steel raised domestic scrap prices by JPY1,500/mt ($14.2/mt) for deliveries to its Tahara plant, JPY1,000/mt for Takamatsu & Okayama plants, and by JPY500/mt for Kyushu & Utsonomiya plants.
- Japan’s monthly scrap export tender ‘Kanto Tetsugen’ concluded on Nov 11 with the average winning bids up by JPY2,199/mt ($21/mt) fas Tokyo bay compared to last month. The tender sold a total of 20,000mt of ferrous scrap for deliveries scheduled at the latest by December.
- The weekly Davis Index for #1 busheling rose by JPY1,125/mt fas. In the export market, the weekly index for #1 busheling (Shindachi) rose by JPY1,307/mt fob Japan. South Korean mills resisted the current offer level.
- In the Kanto region, the Davis Index for #2 HMS settled up by JPY1,225/mt fas and JPY1,375/mt fob Japan. Traders expect Japanese export prices to increase further amid better demand and higher Kanto tender bids.
- The weekly Davis Index for HS and shredded rose by JPY1,000/mt and JPY975/mt fas, respectively.
- On Wednesday, yards offered Japanese HMS 1&2 (50:50) at prices up by $15-20/mt from the prior week, with no deals heard. Few offers for containerized HMS 1&2 (80:20) of US-origin were at prices $5/mt cfr from last week. ($1=JPY105)
- South Korean domestic ferrous scrap prices trended up on the back of rising imported scrap offers. Except for Hyundai, most Korean mills increased domestic scrap prices by KRW10,000-20,000/mt ($10-18/mt) delivered Pohang this week.
- The weekly Davis Index for domestic Heavy A, Tuesday, rose by KRW11,667/mt and delivered Incheon and Pohang, respectively.
- Most mills preferred lower-priced Light A scrap, and the weekly index for domestic Light A rose by KRW12,500/mt delivered Pohang mill.
- With Chinese mills increasing billet imports, steel mills could raise production, targeting December deliveries.
- Containerized imported ferrous scrap prices in South Korea rose this week due to increased offer prices. Demand, however, is still under pressure, with mills holding enough scrap inventories.
- The weekly Davis Index for containerized HMS 1&2 (80:20), Wednesday, increased by $3/mt cfr.
- Mills preferred to negotiate for Japanese bulk scrap over higher-priced US-origin material. Offers for Japan-origin busheling (Shindachi) rose by JPY1,500/mt cfr this week.
- In the coming days, however, mills expect steel demand to improve both in the export and domestic market aided by billet demand in China and other Asian countries. Bids for billets rose by $10/mt on Wednesday cfr Southeast Asia with a deal for 30,000mt billets heard on a cfr China basis.
- The weekly Davis Indexes for P&S 5ft, #1 HMS, and shredded rose by $14/mt, $5/mt, and $9/mt cfr South Korea, respectively.
- South American suppliers offered HMS 1&2 (80:20) at cfr South Korea at prices up by $10/mt from the prior week. ($1=KRW1,114)
- On Thursday, the Davis Index for containerized US-origin HMS 1&2 (80:20) settled up by $1/mt at cfr Taiwan from the prior day and $5/mt from the prior week (Nov 5).
- Steelmaker Feng Hsin focused on purchasing domestic and South American scrap at lower prices to avoid high imported offers.
- The weekly Davis Indexes for containerized P&S 5ft, #1 HMS, shredded and #1 busheling rose by $5/mt, $5/mt, $7/mt, and $4/mt cfr, respectively.
- In the bulk market, offers for Japanese HMS 1&2 (50:50) were up by $15-20/mt cfr.
- Steelmaker Feng Hsin kept rebar and scrap prices unchanged this week. Domestic steel mills are preferring local scrap due to rising global scrap prices. Mills are finding import offers at higher prices unviable, said traders. Market participants indicated that mills had to raise rebar prices last week and might have to increase further to manage the input cost.
- The weekly Davis Indexes for domestic HMS 1&2 (80:20) in South and North Taiwan was flat on Tuesday. ($1=TWD28.5)
- The weekly Davis Index for domestic HMS 1&2 (80:20) rose by VND2500/mt delivered South Vietnam inclusive of taxes, with limited deals heard. A shortage of ferrous scrap and logistical issues due to a storm last week has delayed deals.
- Suppliers, on the other hand, were not interested in accepting lower bids for bulk shipments.
- In the containers market, the weekly index for US-origin HMS 1&2 (80:20) settled at up by $3/mt cfr Vietnam. Bids by other Asian countries were more lucrative, and thus, sellers largely stayed away from the Vietnamese market.
- Vietnamese mills, on the other hand, negotiated for Japan and US-origin material in bulk, and containerized trades took a backseat. Japanese ferrous scrap export prices also started rising this week post the Kanto bids, which again limited transactions.
- The weekly index for P&S 5ft and shredded rose by $4/mt and $3/mt cfr, respectively, on Thursday. Deals were heard for oversized P&S 5ft from Hong kong cfr Vietnam on Tuesday. Vietnamese mills are inquiring for higher grades scrap.
- In the containers market, prices for #1 busheling rose by $3/mt cfr from a week ago. ($1= VND23,233.62)
- The difference between offers and bids in Indonesia is currently around $10/mt cfr. The weekly Davis Index for HMS 1&2 (80:20) rose by $2/mt cfr Jakarta.
- The indexes for P&S 5ft and #1 HMS rose by $3/mt and $4/mt cfr Jakarta, respectively. No deals were heard this week due to the wide gap between offers and bids.
- The weekly Davis Index for shredded rose by $4/mt cfr cfr. Mills raised inquiries for shredded amid rising demand for billet from China. Indonesia sold 30,000 mt steel billet to China this week on a cfr basis.
- 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 up by CNY25/mt($4/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 CNY400/mt ex-works, including 13pc VAT. Billets prices are at an 18-month high. Chinese government agencies are formulating more rebate policies for steel exporters with ultra-low emission levels. This is likely to help mills invest in capacity upgrades and also increase exports.
- Also, the new grading for ferrous scrap could improve the quality and quantity of scrap collection in China and promote the use of EAFs. ($1=CNY6.6)
- The weekly Davis Index for domestic HMS 1&2 (80:20) was unchanged delivered Rayong mill inclusive of taxes. With enough domestic supply to meet the current demand levels, mills stayed away from the bullish import market.
- 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. ($1=THB30)
- The weekly indexes for HMS 1&2 (80:20) rose by MYR50/mt($12/mt), and MYR1,150/mt ($279/mt) delivered western mills and eastern mills including taxes, respectively.
- Mills preferred domestic scrap in limited quantities and continued to avoid imports. Still, offers for US-origin HMS 1&2 (80:20) rose by $5/mt cfr on bullish global cues. ($1=MYR4.1)
- The bullish Turkish market also pushed up offers for South Asian markets. Indian mills exhibited a limited interest in booking imported scrap ahead of the Diwali festival beginning Nov 14. Limited container availability due to a mismatch between imports and exports and holidays for some shipping lines in India for Diwali pushed the subcontinental indexes up.
- The Davis Index for containerized shredded cfr Nhava Sheva rose by $6.06/mt from the prior Friday. Should the restocking continue after Diwali, scrap prices could increase by another $15-20/mt in the coming days.
- Most suppliers focused on catering to the Turkish bulk market and thus diverted supplies from Asian markets. There is a likelihood of supply crunch exacerbating amid COVID-19-related lockdowns for the second time in some supplier countries.
- Traders from the UAE raised HMS offers by $10-15/mt from last Friday on short supply. The Davis Index for UAE-origin HMS 1&2 (80:20) cfr Nhava Sheva was up by $6/mt from the prior week. A shortage of Sponge iron and Pig iron in the domestic market also impacted prices.
- In the billet export market, prices reaching an 18-month high in China aided Indian billet makers to target levels of $450-455/mt fob with no deals to report at those levels yet.
- The index for busheling cfr Nhava Sheva rose by $12/mt from the prior week. P&S scrap traded at prices $8/mt higher than the prior Friday. ($1=Rs74.63)
- Ahead of the Diwali festival, steel and ferrous scrap trades have started dipping in India. But suppliers have kept their offers firm expecting a bullish market next week.
- In Mandi Gobindgarh, the index for HMS 1&2 (80:20) rose by Rs700/mt ($9.38/mt) in a day but fell by Rs400/mt from November 6. Some mills stocked material before the despatches halt for the festival.
- Among other daily markets, the Davis Index for HMS 1&2 (80:90), Thursday, settled unchanged from, Wednesday but fell by Rs500/mt from a week ago. The bi-weekly Davis Index for HMS 1&2 (80:20) increased by Rs1,000/mt from Tuesday but fell by Rs750/mt from November 5.
- Pakistani imported ferrous scrap prices continued to trend up and reached a 20-month peak. Prices increased amid a shortage of containers, approaching winter, and a national lockdown due to a second wave of COVID-19 infections in supplier countries.
- The Davis Index for containerized shredded, Thursday, rose by over $10/mt cfr Port Qasim from last Friday.
- Most mills resisted prices above $340/mt cfr Port Qasim as finished steel demand in the country continues to remain subdued.
- A shortage of HMS scrap also pushed prices up this week. The Davis Index for UAE-origin HMS 1&2 (80:20) rose cfr Port Qasim by $10/mt from Friday. Mills preferred shredded over HMS scrap to avoid paying extra taxes imposed on the imports of the latter.
- The weekly Davis Indexes for P&S and #1 busheling cfr Port Qasim, rose by $7/mt and $11/mt, respectively. Trades for premium scrap grades also increased over this week as supply is expected to thin in the next few days.
- With a reduction in power tariffs announced by the government, Pakistan steel mills could lower their offers for rebar supported by a decline in input costs. In the domestic market, Bala billet prices were unchanged from the prior week amid recovering demand.
- The weekly Davis Indexes for G-60 rebar and Pure Q toke scrap equivalent to shredded settled flat ex-works Karachi. The Pakistani currency continued to appreciate and reached a five-month high of PKR159 against the US dollar, aiding importers.
- In the northern region, the local government has imposed restrictions on some secondary rolling mills and furnaces, especially those without smog or carbon emission control machinery. Mills are directed to pause production for a few weeks to control heavy smog. ($1=PKR158.35)
- Weak demand for rebar in the Bangladesh domestic market is still plaguing steelmakers, who have been unable to raise their asking prices. Still, few mills looked to restock before imported scrap prices increase further. Large steelmakers were inclined towards booking bulk rather than buying containerized shredded.
- In the Japanese Kanto tender on November 11, one of the winning bids was for 15,000mt #2 HMS by a leading steelmaker in Bangladesh, according to Davis Index sources.
- The Davis Index for containerized shredded, Thursday, rose by $8.71/mt cfr Chattogram from Friday. Offers jumped amid strong global cues. A few mills were hoping to book shredded at prices lower by $10/mt than present offers from South America and Australia.
- The weekly Davis Index for containerized US-origin HMS 1&2 (80:20) cfr Chattogram up by $7.5/mt from Friday.
- P&S from the UK and Latin America was priced $6/mt higher than the prior week. Indonesian buyers were active for busheling trades paying the highest prices in Asia supporting a surge in prices for Japanese material.
- The weekly Davis Index for domestic billet Friday settled unchanged ex-works Chattogram. However, some stockists sold billets at a discounted price ex-works Chattogram amid weak demand.
- Large steel producers like BSRM and AKS kept offers for rebar ex-works. Domestic shipbreaking scrap equivalent to P&S traded ex-yard Chattogram at prices down by BDT500/mt from the prior Friday. Offers for scrapped vessel imports were unchanged with indications of increased arrivals till the end of the year. ($1= BDT84.77)
- The weekly Davis Index for CIS basic pig iron rose by $15/mt fob Black Sea on Friday on fresh sales into China.
- China returned to pig iron markets this month with strong demand and booked a Russian cargo this week at $408/mt cfr. The new sale has triggered another round of increased offer prices with offers into China now trending at $410-415/mt cfr, which puts fob Black Sea levels at $380-385/mt.
- The weekly Davis Index for CIS pig iron in Italy increased by $12/mt on Friday as suppliers raised offers to $400/mt by the end of the week, after starting the week at an offer level of $390/mt cfr. There were no deals reported in Italy.
- Offer prices to the US have increased to $395-400/mt cfr with little interest at the moment from US buyers who have so far refused to chase the market driven by China’s appetite.
- A Turkish mill booked pig iron at $389/mt cfr Marmara this week, up by $10/mt from a book a week earlier.
- The weekly Davis Index for basic pig iron (BPI) increased by $8/mt cfr New Orleans port on Thursday as demand and sales prices into China mounted while offer levels to the US continue rising.
- The domestic scrap, metallic imports and finished steel markets have firmed in November with expectations pointing to continued price growth through the end of December. Market participants mentioned that the BPI market could feasibly reach $400/mt cfr Nola by the year-end.
- The most recent BPI sales from late October into the US stood around $377-382/mt cfr Nola. US buyers are being quoted $390-395/mt cfr Nola for BPI cargoes on Thursday, for January shipment. No deals have been confirmed at that price yet.
- The latest November BPI sales into China and Taiwan from the CIS transacted at $405/mt cfr, which would correlate to $390-395/mt cfr Nola. Recent deals are also up $10-13/mt from prior sales that concluded in late October at $392-395/mt cfr.
- The Davis Index for nodular pig iron (NPI) imports was flat. Availability of this grade has been limited and the material is being offered into the US market at $435-440/mt cfr Nola on Thursday, the same level as the end of October.
- The weekly Davis Index for US hot briquetted iron (HBI) imports was also unchanged. Offers or bids have not been reported for HBI as demand has been low, however pricing for the material is projected at this level on Thursday, based on price trends for comparable scrap grades.
- Prices for Sponge iron remain bullish due to the persisting shortage of iron ore and the resulting rise in prices. On Thursday, the index for Sponge iron settled unchanged from a day ago but increased by Rs400/mt del Mandi Gobindgarh mill from the last Friday.
- The index for Sponge iron rose by Rs700/mt del Raipur mill in a day, supported by a surge in billet prices. ($1=Rs74.62)
India semi-finished and finished steel
- The index for billet in Mumbai rose by Rs800/mt ($10.72/mt) from the previous Friday amid a rise in imported scrap prices along with sustained demand. The index for rebar increased by Rs700/mt ($9.38/mt) on healthy sales.
- In Raipur, the index for billet increased by Rs250/mt ($3.35/mt) from the previous Friday due to pre-Diwali restocking amid expectations of a bullish market in the coming days. The index for rebar was up by Rs300/mt ($4.02/mt).
- In Jalna, the bi-weekly index for billet rose by Rs1,000/mt ($13.4/mt) on Thursday. Prices increased supported by the low availability of material. The bi-weekly index for rebar surged by Rs1,300/mt ($17.42/mt).
- In Mandi Gobindgarh, the index for ingot increased by Rs100/mt ($1.34/mt) from the previous Friday. ($1=Rs74.63)
Indian shipbreaking scrap prices in Alang rose on Thursday amid healthy demand from the rolling mills in the North and Gujarat ahead of Diwali festivities. The daily Davis Indexes for 4Ani increased by Rs550/mt ($7.37/mt) and 10Ani rose by Rs150/mt ($2.01/mt).
Demand for plates also perked up ahead of Diwali. The indexes for 0.5kg plate and 1g plates rose by Rs650/mt. While those for HMS attachments and Melting scrap rose by Rs700/mt and Rs500/mt.
Shipbreakers expect the prices to rise further after the festival. ($1=Rs74.4)