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WEEKLY SCRAP WRAP: Turkey, Asia move higher, US outlook mixed

Friday, 01 October 2021

Turkish heavy melting scrap prices rebounded amid new interest from importers. Several bookings of Europe- and Baltic-origin material were reported during the week ended Oct. 1 with prices recovering to around $435/mt CFR first and then approaching $440/mt CFR or even higher in combination with shredded and bonus grades. US suppliers were muted during the week, but one sale was reported on Oct. 1 with the HMS 1/2 80:20 priced at $443/mt CFR Izmir alongside shred and bonus at $458/mt CFR. Market players were awaiting further deals from the US in the first week of October. One offer for the US-origin HMS 1/2 80:20 material was heard at $447/mt CFR Turkey.

Indian shredded scrap import prices inched up in the week after an earlier drop as buyers started to return to the market with new inquiries and higher bids. Traders noted fresh interest in containerized cargoes from the UK and Europe after a period of more demand for the scrap from the Middle East.

S&P Global Platts assessed Indian imports of shredded scrap at $515/mt CFR Nhava Sheva Oct. 1, up $4/mt on week.

Multiple market players already reported higher workable levels for both India and Pakistan, with $515/mt CFR Nhava Sheva looking increasingly workable. Offers were raised to a maximum of $520-$525/mt CFR.

US domestic scrap prices had a mixed outlook ahead of October trading. There was some discussion of primes and shredded scrap to move in opposite directions, as obsolete grades remained firm while primes were under pressure.

The outlook on prime prices was muddied as an integrated steelmaker jumped into the market during the week and purchased prime scrap for October delivery at unchanged pricing from September in the Midwest. The buying activity cast some doubt on the wider expectations of a $20-$30/lt drop in prime scrap prices with declines possibly localized to certain regions.

The heavy recycled steel market in China continued its uptrend week on week, into its third consecutive week, following a strong Japanese domestic market. Regionally, Japanese sellers offered HS, likened to the HRS101, to South Korea at Yen 62,500-63,000/mt FOB. However, the highest bid in the region, particularly from South Korea, was at Yen 61,500/mt FOB Oct. 1, which if normalized for a $45/mt freight to China would equate to a level of $598/mt CFR.

Meanwhile, stricter production cuts for the second half of 2021, in conjunction with recent power rationing, continued to weigh on Chinese buyers’ interest in importing scrap.

The Japanese light scrap market trended higher during the week. Export offers for H2 grades were heard ranging above Yen 48,500/mt, with Vietnam noting CFR prices at $500-$510/mt, while South Korean buyers were citing offers at Yen 50,000/mt FOB and above, and with H1:H2 50:50 offers to Taiwan at $505/mt CFR.

Although the higher offers were garnering slightly higher bids from regional buyers, that failed to lead to a robust seaborne market, and the sell side in Japan was, if anything, unfazed by it.

Meanwhile, the Japanese domestic market remained bullish. “We’ve been very busy with sales, but domestic sales … not exports,” a Japanese trader said. “Kansai-region mills have been very active in procuring inventory and it is even profitable to move scrap from Kanto to Kansai.”

East Asia deepsea prices stayed lateral week on week. Indicative offers to South Korea were still hovering unchanged week on week at $505-$510/mt CFR for HMS 1 basis US-origin cargoes, though the sell side mentioned limited buying interest as steelmakers were seeking cheaper local supplies as an alternative. Meanwhile, offers to Vietnam were likewise unchanged on week, with HMS 1/2 80:20 US-origin cargoes at $505/mt CFR.

-- Staff

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