Weekly round-up: Global scrap market witnesses mixed trend as trades slow down

The global ferrous scrap market exhibited mixed sentiments this week, although prices edged up. South Asian scrap buyers, Bangladesh and India, recorded a couple of bulk cargo bookings. On the other hand, Pakistani buyers struggled with LC opening issues and are likely to shut down some production facilities in the near term. Steel mills in Turkiye slowed down bulk cargo bookings this week.

Japan’s Kanto Tetsugen scrap export tender concluded this week with prices rebounding. Following this cue, Tokyo Steel increased scrap purchase prices after three months of decline.

Country-wise overview

• Turkiye’s imported scrap market muted: The imported ferrous scrap market in Turkiye slowed down as higher prices were heard in the market. Buyers booked material only on hand-to-mouth basis and are now focused on finished steel bookings and sales. Demand from overseas markets appears limited at present. SteelMint’s assessment for HMS 1&2 (80:20) from the US stood at $415/t CFR Turkey, up $5-10/t w-o-w.
• Pakistan’s raw material crisis worsens: The raw material crisis has further worsened in steel mills across Pakistan due to low availability of foreign exchange reserves. The State Bank of Pakistan has already asked banks to open LCs on a priority basis for the import of essential products. The restriction on LCs has forced traders and steelmakers to stage protests pitching for their demands. Major steel producers raised domestic rebar prices significantly by PKR 5,000-8,000/t due to the continuous hike in raw material prices. SteelMint’s assessment for shredded scrap in containers stands at $460-465/t CFR, unchanged w-o-w. Prices are hovering at a four-month high.
• Bangladeshi mills book two bulk cargoes: Imported bulk scrap trades have resumed in Bangladesh, and two bulk cargoes were booked from the US and Australia after a prolonged gap of five months. Chittagong-based mills have booked bulk cargoes for February shipments.A major mill has booked bulk scrap from the US comprising 32,000 t of HMS (80:20) and shredded at $448/t CFR and $458/t CFR Chittagong, respectively. Another cargo from Australia comprising 30,000 t of HMS (80:20) and shredded scrap was booked at $445/t CFR and $465/t CFR Chittagong, respectively. The last bulk deal was recorded at $455/t for HMS from the US in August 2022. Despite strict restrictions on new LC openings, some mills have booked bulk cargoes while others are cautious due to LC concerns. The LC issue has led to a slowdown in fresh import scrap bookings over the last few months. Fresh containerised offers for UK-origin shredded scrap are at $475/t CFR, up $10/t w-o-w.
• Indian mills book bulk cargo: Gujarat-based induction furnace (IF) steel manufacturer, Mono Steel India Limited, recently bought a couple of US-origin bulk scrap cargoes. Each cargo was 30,000 t of which HMS, shredded and bonus material were booked at $460/t. Another vessel was booked at $450/t for January-February shipment. Imported scrap buyers are cautious as prices are unstable. However, limited deals were recorded for containers. A few buyers kept a close watch on market dynamics before taking procurement decisions, as bid-offer disparity still exists.SteelMint assesses Europe-origin shredded scrap offers to India at $460/t CFR Nhava Sheva, up $5/t w-o-w.
• Vietnam market quiet ahead of Tet holidays: Due to bid-offer disparity, Vietnam’s imported scrap market remained mostly silent for yet another week. Due to the lack of finished steel demand, the market remained subdued. Vietnamese steelmakers are likely to stay out of the market this month, returning only after the Tet and Lunar New Year holidays. Assessments for US-origin bulk offers are now at $410-415/t CFR. SteelMint’s assessment for Japanese H2 material is at $410/t CFR, up $4/t on-week.
• Japan’s Kanto scrap export prices rebound: A total of 11,000 t of scrap was awarded in the Kanto tender, with the average price for H2 scrap at JPY 50,932/t ($387/t). Compared to December, bid prices increased by JPY 3,364/t ($26/t). Japan’s Sangyo Shinko won the first bid for 6,000 t at JPY 51,030/t FAS ($399/t), while JFE Shoji won the second bid for 5,000 t at JPY 50,815/t ($405/t) FAS. Prices have rebounded after two consecutive rounds of decline in the last two months.
• Tokyo Steel raises domestic scrap purchase price: Tokyo Steel raised its scrap purchase price for the first time this month by up to JPY 2,000/t ($15/t) for all its plants. The company would pay JPY 51,000/t ($339/t) for H2 scrap for the Tahara, Utsunomiya, and Okayama plants. Interestingly, prices have increased after declining continuously since October.