Imported ferrous scrap markets in Southeast Asia were quiet with many countries announcing complete lockdowns. Before April 1, when Vietnam went into a lockdown, limited trades with mills in the country were reported. Japan mulls tightening its COVID-19 control measures as cases continue to rise. South Korean mills, where melting activity is relatively unaffected, held back bids for Japanese ferrous scrap anticipating another JPY1,000/mt drop in prices next week.
Japanese ferrous scrap export prices continued to fall this week. Japanese #2 HMS traded at JPY20,000-20,500/mt fob Japan, down by JPY500-1,000/mt from the prior week. But South Korean mills are expecting prices to drop further by JPY500-1,000/mt to JPY19,000-19,500/mt fob Japan next week.
The Japanese government is considering a complete lockdown to control the rising spread of the virus. If these measures are imposed, traders could find it difficult to ship booked cargoes. Yards refrained from confirming new orders.
Imported ferrous scrap prices in Taiwan have been on a downtrend for the past four weeks. Another $8-10/mt drop in prices is expected in the near term on global cues and slow demand. Taiwan’s steel production was lesser affected than other countries.
The weekly Davis Index for containerised US-origin HMS 1&2(80:20) settled at $206/mt cfr Taiwan on Thursday, down by $8/mt. Trades for containerised HMS 1&2 (80:20) concluded at $205-210/mt cfr Taiwan early in the week. Bids from steelmakers subsequently dropped to $200-203/mt cfr Taiwan following global cues. In a week, billet prices fell by $5-10/mt below $400/mt cfr.
The Davis Index for containerised shredded settled at $218/mt cfr Taiwan, down by $7/mt from the prior week. US-origin containerized shredded traded at $218-220/mt cfr Taiwan early in the week.
Japanese HMS 1&2 (50:50) in small bulk cargoes was offered at $215-220/mt cfr Taiwan early this week. Trades, however, concluded at $210/mt cfr Taiwan. A Japanese EAF maker offered billets at $395-400/mt cfr Taiwan with bids for the same at $360-370/mt cfr Taiwan. Inquiries have reduced and will resume only next week due to Tomb sweeping day holidays till April 5.
The Vietnam government has announced 15 days lockdown until April 15 amid the COVID-19 pandemic. Major automakers including Toyota have announced production halts till April 10, resulting in weakened demand this week. A force majeure is likely to be announced at Ho Chi Minh, a major port in the country.
A southern mill booked Japanese bulk cargo comprising 9,000mt #2 HMS at $213/mt cfr Vietnam, down by $10-15/mt from the prior week. A northern mill booked 6000mt #2 HMS at $220/mt cfr Vietnam this week.
Japanese scrap export prices dropped by $15-20/mt cfr levels due to diminished demand. Offers for #2 HMS in small bulk cargoes were at $220-225/mt cfr Vietnam and at $255-260/mt cfr Vietnam for HS scrap with no takers. Bids for Japanese busheling were reported at $250-255/mt cfr Vietnam.
Hong Kong-origin HMS 1&2 (50:50) in bulk was offered at $215-220/mt cfr Vietnam, down by $10-15/mt from the prior week. But mills were interested in $210/mt cfr levels, thus no trades materialised.
In container market, the Davis Index for containerised P&S 5ft settled at $238/mt cfr Vietnam, down by $7/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 $216/mt cfr Vietnam, down by $12/mt from the prior week.
Bids by Indonesian mills were matched by many suppliers who dropped prices to liquidate inventories. In two weeks, global ferrous prices have dropped by $60-70/mt and are likely to drop further. Suppliers thus looked to liquidate their inventories.
A few mills scaled down production to match decline in demand as the global economy is going through a difficult phase. The Davis Index for containerised P&S 5ft settled at $238/mt cfr Jakarta, down by $23/mt from the prior week. US-origin P&S in 40feet containers traded at $235-238/mt cfr Jakarta, but subsequently bids dropped further to $225-230/mt cfr Jakarta.
An Indonesian mill traded 4sp billet at $375-380/mt cfr Southeast Asia, down by $5/mt from the prior Thursday. Domestic heavy melt scrap was priced at $218-220/mt del Indonesia mill, down by $15-17/mt from the prior week.
The weekly index for busheling scrap settled at $258/mt cfr Jakarta, down by $12/mt. The Davis Index for containerised shredded settled at $234/mt cfr Jakarta, down by $24/mt from the prior week.
Suppliers from Hong Kong sold AA scrap equivalent to P&S in containers at $250-255/mt cfr Jakarta.
The Davis Index for containerised HMS 1&2 (80:20) settled at $219/mt cfr Jakarta, down by $15/mt from the prior week. Offers of $220-225/mt from US suppliers were rejected by buyers. 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.