Domestic ferrous scrap prices in most Asian markets trended flat to up. Offer prices from the US and Europe increased which made mills opt for domestic scrap over imports. Japanese domestic prices have remained flat for three weeks, while export prices declined. Asian buyers could, therefore, eye Japanese ferrous scrap in the coming days.
South Korea
South Korean domestic ferrous scrap prices trended mixed this week. Market participants were expecting Hyundai and Dongkuk Steel to lower bids for domestic scrap by KRW10,000/mt del mill on Monday. But amid a shortage of domestic scrap, these mills have delayed their decision to lower their purchase prices. The mills were also negotiating deals with Japanese and US yards, but no deals were heard till the time of publication. After last week’s Russian A3 scrap trade at $281/mt, no deals were heard for the grade.
The Davis Index for domestic Heavy A delivered Incheon, Tuesday, settled flat at KRW320,000/mt ($281/mt) delivered mills, by fell by KRW5000/mt($4/mt) del Pohang mill with bids at KRW310,000/mt. Most mills preferred lower-priced Light A scrap this week and the weekly Davis Index for domestic Light A rose by KRW20,000/mt to KRW295,000/mt delivered Pohang mill. Trades for the grade were reported at the index price.
Taiwan
Rebar prices were flat in Taiwan on Tuesday for the third week as trades remained slow. Feng Hsin Steel anticipates prices to remain flat until the demand for finished steel does not improve. Feng Hsin’s base offers for rebar was at TWD14,600/mt ex-works.
The weekly Davis Indexes for domestic HMS 1&2 (80:20) in South and North Taiwan were up by TWD175/mt($6/mt) and TWD200/mt at TWD7,300/mt ($254/mt) and TWD7,500/mt delivered mill, respectively. Offers increased on the back of firm global scrap prices and domestic ferrous scrap shortage.
In seaborne markets, US-origin containerized HMS 1&2 (80:20) offers were at $268-270/mt cfr Taiwan with a deal heard at $268/mt. Most bids were still at $260/mt but buyers could give in and raise their bids if scrap prices in international markets continue to rise. The daily index for containerized US-origin HMS 1&2 (80:20) settled up by $2/mt at $266/mt cfr Taiwan. Offers for HMS 1&2 (90:10) were at $270-275/mt, while no deals were heard at those levels.
In the bulk market, a deal for Japanese HMS 1&2 (50:50) was heard this week at $288/mt on Monday. Taiwanese mills were also negotiating for Russian A3 scrap, but deals are to be finalized.
Market participants are expecting prices to rise amid increasing offers from the US.
Vietnam
The weekly Davis Index for HMS 1&2 (80:20) rose by VND25,000/mt($1/mt) to settle at VND6,625,000/mt ($284/mt) delivered South Vietnam inclusive of taxes, with limited deals heard at the index price. Shortage of ferrous scrap in the domestic market and rising scrap import offers lifted prices, said traders. Vietnamese mills stayed away from booking imported scrap, while suppliers were not interested in accepting present bid levels for bulk shipments.
Vietnamese mills are gradually increasing domestic and imported scrap purchases amid improving billet prices in China.
In the bulk market, a deal for Japanese HS was heard at $327/mt cfr on last Thursday.
China
In China, Shagang Steel raised domestic scrap prices and finished steel prices for October deliveries. The weekly Davis Index for the HMS 1&2 (80:20) settled at CNY2,675/mt ($400/mt) delivered mill, up by CNY10/mt from the prior Tuesday.
Prices for Q235 150mm square billets in Tangshan, North China’s Hebei province rose by CNY10/mt to CNY3,410/mt ex-works including the 13pc. Few small rebar manufacturers resumed production after pausing operations for around 15 days to control pollution. Chinese September steel output rose by 0.9pc from the previous month as mills ramped up production to meet demand from infra projects. But steel prices could be on a downtrend with increased production and the demand for raw material could be sluggish.
GDP rose by 0.7pc in October after slow growth between January to March amid slow investment in the real estate sector.
Thailand
The weekly Davis Index for domestic HMS 1&2 (80:20) settled unchanged at THB9,150/mt ($293/mt) delivered Rayong mill inclusive of taxes. Mills have slowly started increasing buying after a three weeks hiatus amid high inventory. A few trades were heard for South American HMS 1&2 (80:20) at $280/mt cfr. They expect imported scrap volumes to rise in the coming weeks with a firm demand for billets in China.
Sluggish domestic finished steel demand is still a cause of concern for many mills dependent on the construction and infrastructure sectors.
Malaysia
The weekly indexes for HMS 1&2 (80:20) rose by MYR100/mt($24/mt) to MYR1,100 /mt ($265/mt), and MYR1,175/mt ($283/mt) delivered western mills and eastern mills including taxes, respectively. The price rise was due to a domestic scrap shortage and an increase in imported scrap prices.
No trades were heard in the import market, but demand for ferrous scrap could rise in the coming days.
Market participants are expecting domestic demand for finished steel to rise slowly in the next few weeks as COVID-19 cases declining. Offers for US-origin HMS 1&2 (80:20) were at $260-265/mt cfr.
($1= JPY105; TWD28.7; CNY6.7; THB31; MYR4.15; VND23,180; KRW1,138)