High imported scrap offers, globally, pushed Asian domestic scrap prices up in almost all markets. Increased competition to secure domestic supplies supported prices. Holidays in Japan and China and the ongoing Ramadan lull limited trades in terms of volumes. Steel prices scaling decade’s high and improving demand fuels a healthy outlook for ferrous scrap trades in the coming days, while logistic challenges and higher freight rates are expected to spike the landed cost of imported scrap higher in Asia.
Domestic ferrous scrap prices in South Korea rebound this week on higher imported scrap offers. Most mills opted for domestic scrap purchases amid a jump in imported prices on increased freight charges.
Increased domestic consumption drove price in Incheon. South Korean mills expect strong steel demand from China post-Labour holidays. The weekly Davis Index for domestic Heavy A, Tuesday, rose KRW5,000/mt to KRW465,000/mt ($413.8/mt) delivered Incheon. Major steelmakers bought domestic scrap at KRW465,000-470,000/mt delivered Incheon and Pohang mills.
In the Pohang region, where most Korean mills resumed trades for the domestic scrap, prices rose by KRW5,000-10,000/mt ($9-18/mt) delivered. The weekly Davis Index for domestic Light A grade at KRW445,000/mt del Pohang, up KRW7,500/mt. While the weekly Davis Index for domestic Heavy A, Tuesday, increased by KRW5,000/mt to KRW470,000/mt ($418/mt) delivered Pohang.
With Chinese mills increasing billet imports, steel mills in South Korea are expected to ramp up production for exports.
Leading Taiwanese steelmakers Feng Hsin raised ferrous scrap bids by TWD200/mt on Monday. The steelmaker hiked its rebar prices by TWD400/mt. Domestic steel mills are preferring local scrap while lowered their bids for imported materials. Feng Hsin’s base offers for rebar jumped to TWD20,200/mt ex-works, creating room for higher ferrous scrap prices in the coming days.
The weekly Davis Indexes for domestic HMS 1&2 (80:20) rebound by TWD200-300/mt on Tuesday to TWD11,800/mt ($422/mt) and TWD12,000/mt delivered southern and northern mill, respectively. Domestic P&S traded at TWD12,300-12,500/mt delivered mill.
In seaborne markets, the daily Davis Index US-origin containerized HMS 1&2 (80:20) dropped by $5/mt to $428/mt cfr Taiwan amid lowered bids. Most bids were at $425/mt cfr countering offers of $435-440/mt on Tuesday.
Japan is closed for Golden Week Holidays from April 29 till May 5. Participants expect trades to resume after May 5. Tokyo steel has held ferrous scrap purchase prices unchanged since April 21 with bids for #2 HMS are at JPY44,000/mt ($403/mt) delivered Tahara, JPY44,000/mt delivered Okayama, JPY43,500/mt delivered Kyushu, JPY42000/mt delivered Utsunomiya and JPY42,500/mt delivered Takamatsu.
Japanese scrap exporters await Kanto Tetsugen tender result to offer clarity on the price direction post-holidays. In seaborne markets, scrap exporters raised offers for #2 HMS to as much as JPY44,500-45,000/mt fob Japan before trades closed on April 29.
In China, Shagang steel raised its finished steel prices by CNY300-450/mt for early May deliveries amid strong demand. Steel prices in China have scaled a decade’s high. Most mills paused their procurement activities after restocking actively ahead of the Labour Day holidays from May 1-5.
Mills are expected to increase domestic procurements amid a jump in Japanese scrap export offers to bring it in parity to domestic scrap prices. However, cancellations of import duties on scrap could offset high offers. The weekly Davis Index for the HMS 1&2 (80:20) settled at CNY3,525/mt ($542/mt) delivered mill, up CNY15/mt including 13pc VAT.
Ferrous scrap prices might rise further driven by a rise in demand for billets in the domestic market. Offers for billet imports in China rose above $680-685/mt cfr China up $10/mt from the prior week. As China has waived off import duty on steel products from non-ASEAN nations, ASEAN billet makers have lost their advantage over steel exporters from India, Russia and Japan.
Prices for Q235 150mm square billets in Tangshan were at CNY4,990/mt ex-works including the 13pc VAT before closing for holidays and expected to climb up after resumption of trade on May 6.
The weekly Davis Index for HMS 1&2 (80:20) in Vietnam, Tuesday, rose by VND800,000/mt ($34/mt) to VND10250,000/mt ($441/mt) delivered South Vietnam inclusive of taxes. The domestic steel market is gradually recovering in Vietnam and construction activities are picking up.
HRC imported into Vietnam heard at $970-980/mt cfr Vietnam amid offers from India and South Korea suppliers above $1,000/mt cfr Vietnam. Holidays in China and Japan have impacted steel trades and ferrous scrap supply to Vietnam, but many mills are also working at limited capacity this week.
Increased billet trades in Asia and elevated freight charges raised imported scrap offers to Thailand. The domestic supply of ferrous scrap remains tight, yet many steel mills avoided imported scrap bookings due to Ramadan holidays and preferred domestic material for immediate melt requirements.
The weekly Davis Index for domestic HMS 1&2 (80:20) rose by THB475 from THB13,425/mt ($432.16/mt) to THB13900 delivered Rayong mill inclusive of taxes. On Tuesday, thin trades reported in the range THB13,400-13,450/mt. Deals for domestic P&S 5ft heard above THB15,000-15,500/mt on Tuesday. Thailand based mills are waiting for trades
The weekly index for HMS 1&2 (80:20) rose by MYR175/mt from the prior Tuesday to MYR1825/mt delivered eastern mills, while rose from MYR1,625/mt last Tuesday to MYR1,800/mt delivered western region inclusive of taxes, respectively. Offers for domestic P&S 5ft at MYR1,900/mt delivered mill.
Most Malaysian mills have halted purchases from seaborne markets since mid-April. Amid the shortage of domestic scrap, many mills raised bids for domestic scrap to avoid depletion of inventory.
Offers for imported US-origin HMS 1&2 (80:20) rose by $15-20/mt to $435-440/mt cfr Malaysia on bullish global cues.
($1= JPY108.2; TWD27.87; CNY6.48; THB31.37; MYR4.09; VND23010; KRW1,111)