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UK scrap contract prices soften in line with weaker global market

Friday, 13 August 2021

August monthly contracts in the UK domestic scrap market softened on the month across the grades as weaker international demand dampened domestic pricing, sources said.

S&P Global Platts' assessment of 3B shredded scrap was GBP 310/mt delivered to the mill on Aug. 13, down on the month from GBP 327.50/mt delivered in July.

Market sources cited a wide range of workable values over August trading, with some sell side sources settling at GBP 300-305/mt delivered. Other sources cited workable levels at GBP320/mt delivered.

“We settled down GBP 20/mt on the month, but I’ve shot myself in the foot as containerized shredded scrap prices in South Asia are up again,” one UK trader said.

Platts’ assessment of the bellwether Turkish import premium heavy melting scrap 1/2 80:20 market has fallen $46.75/mt since a recent peak on June 29, and was assessed at $455/mt CFR Aug. 13. However, demand for higher Fe yield grades such as shredded scrap has largely remained stronger compared to HMS.

Some UK recyclers said they preferred to sell into the containerized export market, where higher prices were achievable, thus selling limited volumes of shredded scrap domestically.

Platts assessed Indian imports of containerized shredded scrap at $524/mt CFR Nhava Sheva Aug. 13, up $4/mt on the week.

The neighboring Pakistan market, where prices are generally higher than into Nhava Sheva, saw workable levels cited at $530-$538/mt CFR Port Qasim Aug. 13, as demand recovered towards the end of the week from a low of $520-$525/mt CFR midweek.

One major Pakistani mill was heard to be aggressively buying any prompt shipment shredded scrap.

UK yards selling shredded material sold for containerized export were accepting prices around GBP 315-325/mt EXW yard, with sources citing a quality differential between domestic and export material.

The assessment for OA Plate and Structural scrap was at GBP307.50/mt delivered Aug. 13, down from GBP 330/mt in July.

“The lowest we heard for OA was GBP 290/mt delivered, but most deals were at GBP 300-305/mt delivered – it depends on the region but prices in the Northeast are better,” one trading source said. A UK recycler said workable levels were as high as GBP 320/mt delivered, while a second UK recycler said GBP 300/mt delivered was the August level.

Dockside pricing from deepsea exporters for OA material was heard to range between GBP 290-310/mt delivered, with sellers looking to boost the attractiveness of the HMS cargoes with larger proportions of OA.

Prime grades were still heard to be firm but fell from record highs, with Platts assessment for 4A New Steel Bales assessed at GBP 400/mt delivered Aug. 13, down GBP 40/mt on the month. Tradable values were heard at GBP 350-425/mt delivered.

Demand for higher-yield grades like new production scrap has risen sharply over 2021, especially from flat and special steel producers globally. Regular cargoes of baled automotive scrap have been heard to be sold into the US over 2021 from UK sellers, according to Panjiva data.

An EU recycler said E6 baled thin new production scrap was workable above Eur500/mt delivered in Germany and the Benelux region.

-- Viral Shah

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