Imported ferrous scrap markets in Southeast Asia were ruffled by the spread of COVID-19 and resulting lockdowns announced by major markets in West Asia. Vietnam and South Korean mills, however, continued to purchases bulk cargoes. These countries have been able to hold their steel production stable.
Mills fear a drop in global flat steel prices given China’s surged inventory levels. A steep decline in global ferrous scrap and billet prices is a possibility with the global prices already on a downtrend, driven by Turkish markets. The Davis Index for HMS 1&2 (80:20) US origin settled at $227.5/mt cfr Turkey March 25, down $3.36/mt on a day.
Japan
Japanese ferrous scrap prices remained under pressure amid oversupply and weak domestic demand. Bulk #2 HMS traded at JPY21,000-21,500/mt fob Japan, down by JPY500-1000/mt from last week.
Export prices for busheling scrap likely to remain flat with auto plants closed in the country. Traders believe production closures by major car makers like Toyota and Mazda is likely to create supply scarcity of busheling with scrap generation falling by around 40pc. Busheling prices were in the range of JPY23,500-24,000/mt fob Japan. South Korean mills could pay a premium for busheling in the coming days.
Taiwan
Imported ferrous scrap prices in Taiwan dropped by $8-10/mt on global cues. Trades dipped as buyers await a further price drop in the coming days.
The weekly Davis Index for containerised US-origin HMS 1&2(80:20) settled at $214/mt cfr Taiwan on Thursday, down by $9/mt. Trades for containerised HMS 1&2 (80:20) concluded at $215-220/mt cfr Taiwan early in the week. Bids from steelmakers subsequently dropped to $210-213/mt cfr Taiwan pressured by lowered billet prices in Southeast Asia. Billet prices fell by $5-10/mt in a week to below $400/mt cfr levels.
The Davis Index for containerised shredded settled at $225/mt cfr Taiwan, down by $7/mt from the prior week. Shortage of containers has started easing but loading on South Asian route is being cancelled with countries in the region announcing a complete lockdown.
Feng Hsin steel offered rebar at NT$14,800/mt ex-producer, but trades after discount were reported at $14,000-14,200/mt ex-producer this week.
Japanese HMS 1&2 (50:50) in small bulk cargoes traded at $230/mt cfr Taiwan early in the week. But offers in the latter part of the week were at $225-230/mt cfr Taiwan, with no takers. A Japanese EAF maker offered billets at $395-400/mt cfr Taiwan, down by $10/mt from the prior week.
Vietnam
Vietnamese mills continued their ferrous scrap purchases. A southern mill booked Australian bulk cargo comprising 10,000mt HMS 1&2 (80:20) at $248/mt cfr Vietnam, down by $10-12/mt from the prior deal.
In the northern region, mills booked two small bulks of 5,000mt each with Japanese #2 HMS at JPY21,000-21,500/mt fob Japan or $235-240/mt cfr Vietnam, down by $5-10/mt from the prior week. Bids from Vietnamese mills for Japanese scrap cargoes were down by $15-20/mt from the prior week with a drop in Turkish bulk scrap prices.
A mill in southern region booked Japanese P&S scrap equivalent to HS in small bulk cargo at $258-260/mt cfr North Vietnam, down by $10/mt from the prior week. Bids for Japanese #2 HMS and busheling were reported at $225-230/mt and $250-255/mt cfr Vietnam, respectively, but no suppliers were interested at those levels. Offers for busheling were at $265/mt cfr Vietnam.
Hong Kong-origin HMS 1&2 (50:50) in bulk was offered at $233-235/mt cfr Vietnam, down by $5-10/mt from the prior week.
In container market, the Davis Index for containerised P&S 5ft settled at $245/mt cfr Vietnam, down by $9/mt from the prior week. A mill based in the northern region bought US-origin P&S in 40feet containers at $235/mt cfr Vietnam. The Davis Index for containerised HMS 1&2 (80:20) settled at $228/mt cfr Vietnam, down by $6/mt from the prior week.
A major port in Ho Chi Minh is likely to stop its operations to avoid the spread of COVID-19 due to shipments from affected countries.
Indonesia
Indonesian mills remained silent this week hoping for prices to fall in their bid range as the cases of COVID-19 continued to rise globally and impacted stock markets. Traders were not keen to sell in Indonesian markets at mills’ bid levels. Trades remained very thin this week again.
The Davis Index for containerised P&S 5ft settled at $263/mt cfr Jakarta, down by $10/mt from the prior week. US-origin P&S in 40feet containers was offered at $265/mt cfr Jakarta, but bids were at $245/mt cfr Jakarta.
An Indonesian mill offered 4sp billet at $380-385/mt cfr Southeast Asia, down by $5/mt from the prior Thursday. Domestic heavy melt scrap was priced at $230-235/mt del Indonesia mill, down by $15-20/mt from the prior week.
The weekly index for busheling scrap settled at $270/mt cfr Jakarta, down by $10/mt. The Davis Index for containerised shredded settled at $258/mt cfr Jakarta, down by $12/mt from the prior week. The Davis Index for containerised HMS 1&2 (80:20) settled at $234/mt cfr Jakarta, down by $6/mt from the prior week.
Indonesian steel plants including Krakatau steel are operating at lowered capacity utilization rates of around 40pc on weakened finish steel demand in the country. Additionally, the global COVID-19 outbreak would impact world steel demand and Indonesian steel industry’s situation is unlikely to improve till Ramadan in April, shared a Davis Index source.
($1=NT$30.26;VND23,245.51)