Turkey’s importscrapmarket has continued its downward trend unabated, with importscrapprices declining further in each deal. “We all thought that we had hit the bottom at certain levels since prices started to fall from $600s/mt CFR, but the bottom is not here yet it seems,” a source commented. Althoughscrapflow to export yards has slowed down significantly, with some even describing the situation as alarming, Turkish mills have not returned to the market in full force. As a result, importscrapquotationsinTurkeyare still moving down. One seller stated, “NowTurkey’s importscrapmarket may be close to hitting the bottom since collection has slowed down significantly amid the recent cuts in collection prices.” However, a Turkish long steel mill producer said, “Turkeyis not looking for a price bottom or trying to exert pressure onscrapquotations. On the contrary, fallingscrapprices are not helping anybody, sellers or buyers. The problem is not thescrapprice, it is still the lack of finished steel sales. Therefore, if demand does not recover, thescrapmarket cannot either.” It also attracts attention that Turkish mills’ finances are stressed due to various reasons, such as unrealized steel sales, reduced credit lines, and high levels of finished steel inventories in hand. At the end of the week, anotherex-EU scrapdeal pushed prices down once again, and the question of whether this is the bottom is now heard more often. Almost nothing has changed inTurkey’s finished steel market, demand is still insufficient to support a stabilization for product orscrapprices. Since the main problem is not improving inTurkey, importscrapprices are expected to remain soft. Under the current conditions, the deep sea benchmark HMS I/II 80:20scrapin CFR terms has recorded a 9.09 percent decrease week on week. The month-on-month decline is now 28.18 percent in the deep sea segment, with prices being in the range of $315-335/mt CFR.
It is also known that two ex-USbulk cargoes were sold to India, an unusual destination for bulk cargoes from theUS．Also, a SteelOrbis contacts stated that, over the past week, India has bought four to five cargoes from various sources - traditionally suppliers toTurkeysuch as theUS, the EU and the UK - each for 40,000 mt. This adds up with the previous ex-EU transactions to China,BangladeshandVietnam．
In our last report a week ago,scrapmarket sources throughout theUSbelieved thatJuly scrap priceswere poised for a downturn. And while initial predictions put the market at down $10-$0/gt for cuts and shred, and down $40-50/gt for primes, “a lot has changed in the past seven days.” For example, in conversations held over the past 72 hours, some sources have said they believe that cuts and shred could trend down by $20-40/gt, whereas others think that down $50-60/gt may be more likely. Similar, wide-spanning predictions have been heard for bushelingscrap, with some thinking that primes will soften by $50/gt, and others stating they think that busheling could go down by $75-100/gt if not more. The rationale for a possible sharp downturn for cuts and shred in July is linked to several factors, such as still-softeningscrapcargo prices intoTurkeyand an anticipated less-than-ideal Julyscrapbuy from domestic flat rolled producers. Additionally, still-falling sheet steel prices have many finished steel buyers “camped out on the sidelines,” as many are holding off on placing orders until they are sure the market has bottomed out.
The local German scrap markethas continued to fall in the month of June. The recorded decline in prices was lower than the expectations stated in early June, but market players believe that there is more room for a further fall due to the approaching summer. “Since the summer holidays have started in some regions of the EU and will start in others, mills will cut their production utilization rates and their need forscrapwill decline. Also,scrapexport prices are exerting strong downward pressure on local quotations,” a German source reported. One of the traditionalscrapsuppliers toTurkeyhas given bids for HMS I/II 80:20scrapto a German sub-collector at €250/mt DDP Antwerp. At the same time, all SteelOrbis contacts agree thatscrapflow inGermanyhas nearly come to a halt following the recent price cuts.
As anticipated by SteelOrbis,the local Polish scrap markethas moved down further in June. “The market is more or less similar toTurkey．There is no demand for finished steel inPoland．有些工厂生产的休息。Their official announcements mention maintenance, but the real reason is more their lack of sales,” a Polish source commented. As a result, the quantity ofscrapbought by Polish mills has declined over the month of June, causing prices to move down sharply once again. During the past month, prices in the local Polish market for HMS Iscraphave moved down significantly by €130/mt to the range of €330-340/mt DAP, from levels of €460-470/mt DAP. Higher grades like bundlescrapare currently at around €340-350/mt DAP, depending on the mill, according to sources.
The major EAF-based steel producer inJapan, Tokyo Steel, has announced three consecutive price drops this week totaling JPY 2,000-4,000/mt. Tokyo Steel’s prices for H2scrapdeclined to JPY 54,000-55,000/mt ($399-407/mt) deliveredon June 21, and thenclosed the weekat JPY 53,000-54,000/mt ($393-401/mt). In the middle of the week, the mill announced a cut only for itsUtsunomiya plant．The Shindachiscrapprice range of Tokyo Steel has also decreased to JPY 55,000-57,000/mt ($408-423/mt). Japanese sellers’ opportunities in the export market are shrinking as South Korean mills are staying away from imports once again, while Vietnamese buyers consider Japanese prices to be on the high side and are not showing much interest inscrappurchases anyway. As a result, the Japanesescrapmarket is under downward pressure, similar to the international market.
As trading and demand in theVietnamese steel marketremains sluggish, importscrapprices to the country continue to decline. “It is similar to the international trend. Demand is slow, prices are decreasing, and hence there are not many deals done by Vietnamese buyers,” a source reported. Particularly,Vietnam’s steel market is impacted by the negative changes in China. “Although we saw a bit of a recovery today [in the futures market on June 23], I am not sure it will be enough to have a good impact on the physical market,” the source added. Prices for importedscraphave fallen mainly by $20-30/mt depending on the origin inVietnamthis week and some sellers have managed to conclude deals. The outlook has remained gloomy as customers have cut bids even more. SteelOrbis has learned that an ex-EU deal has been done toVietnamwith HMS I/II 80:20scrap站在400美元/吨CFR。日本供应商’ H2scrapoffers toVietnamare standing at $425-435/mt CFR.
The Taiwanese scrap marketis still characterized by silence in terms of trade. Ex-USscrapoffers toTaiwanhave declined sharply over the past week, while Japanese suppliers have only announced a $5/mt softening in their offers toTaiwan．However, once again Japanese suppliers’ offers are considered too expensive as compared to the competition. “We have not received many offers from any of the supplier regions. Today, in particular, is very quiet,” a Taiwanese source commented. The lowest offer price for ex-USHMS I/II 80:20scrapin containers toTaiwanhas been at $380/mt CFR this week, significantly lower than the $425/mt CFR recorded in a deal last week. Meanwhile, offers for Japanese H1/2 50:50scrapby bulk toTaiwanhave been at $435/mt CFR, down only $5/mt compared to the $440/mt CFR level recorded in a deal last week.
South Korean millsare showing little interest inscrapimports, as their localscrapmarket is declining gradually and is expected to continue to do so. “It seems our domesticscrapmarket will continue to fall at a faster pace, and, if it were not for the effort to support product prices, the fall could have been faster. So, if product prices are no longer supportable, we will be lowering the domesticscrapprice much faster and may have little need for importscrap,” a source at a major South Korean mill commented. SteelOrbis has learned that Tokyo Bay FOB based price for H2 grade is at JPY 52,000/mt, which translates to $435/mt CFR South Korea with $50/mt freight. Ex-USbulk HMS Iscrapoffers to South Korea from the West Coast are at around $390-400/mt CFR, while some sources report offers even at $380/mt CFR on Friday, far below the assessment of $450/mt CFR last week.
As a result, the SteelOrbis reference price for ex-JapanH2scraphas settled at JPY 52,000/mt ($385/mt) FOB, down by JPY 1,000/mt on average or $13/mt, taking into currency exchange rate fluctuations, over the past week.
Prices for import scrap in Bangladeshhave posted sharp drops, especially in the containerized segment, over the past week, though trade activity was close to zero affected by slow demand due to heavy rainfalls in many parts of the country, coupled with production cuts due to higher electricity tariffs and the depreciating national currency. In particular, offer prices for ex-UK shreddedscrapin containers inBangladeshhave been voiced at $460-465/mt CFR, down by $65/mt over the past week. Besides, offers for UK/EU HMS gradescraphave settled at $420-425/mt CFR, compared to $480-500/mt CFR last week. At the same time, indicative offers for ex-USand ex-EuropeHMS gradescraphave been reported at $395-400/mt CFR, compared to $400-410/mt CFR last week, while several bids have been heard at $380/mt CFR and below.