Containerized imported ferrous scrap prices decreased this week amid bearish sentiments arising from slow buying in Turkey and limited demand for finished steel in South Korea. Most steel mills halted or opted for wait and watch as Turkish mills bid lower and steel prices turned volatile in China. Fall in iron ore and other raw material prices negated sentiments. Mills stayed away from containerised purchases and preferred negotiating for bulks from Japan and the US.
The weekly Davis Index for containerized HMS 1&2 (80:20), Wednesday, fell by $5/mt from the prior week to settle at $428/mt cfr South Korea. Bids fell by $5/mt to 425/mt cfr on Wednesday from the prior week, while offers fell by $10-15/mt to $430/mt with suppliers trying to clear off inventory in anticipation of a further fall in global scrap prices.
Early in the week, limited deals heard at $425/mt cfr but mills stepped back in anticipation of a further fall this week. With easing supplies, yards were keen on offering more volumes, but buyers exercised restrained as they went on a wait and watch mode.
The weekly Davis Indexes for P&S 5ft and #1 HMS, Wednesday, fell by $14/mt and $7/mt to $451/mt and $433/mt cfr South Korea, respectively. The index for shredded fell by $/10mt to $443/mt from the prior week.
Daehan steel reduced bids by JPY500/mt to JPY42,500/mt ($390.7/mt) fob this week with the expectation of a further fall in prices.
Following the lower-than-expected rise in Kanto bids, Tokyo steel cut scrap procurement prices on Wednesday. The steelmaker’s latest bids for #2 HMS are at JPY42,000/mt ($385/mt) delivered Utsunomiya works in the Kanto region, effective March 11.
South Korean mills are cautious of falling bids for ferrous scrap globally. In China, iron ore prices dropped by $10.5/mt to $163.6/mt cfr on Tuesday.
The Davis Index for domestic Heavy A rose by KRW11,250/mt ($9.9/mt) to KRW435,000/mt ($382.4/mt) and KRW37,500/mt to KRW452,500/mt delivered Incheon and Pohang, respectively. Mills could reduce bids in the coming days due to piled up inventory and weak global cues.
Taiwanese steel mills reduced bids by $5/mt to $425-430/mt cfr on Wednesday. Steel mills were cautious of falling bids from Turkish and Chinese mills and adopted a wait and watch mode. The Davis Index for containerized US-origin HMS 1&2 (80:20) fell by $3/mt to $431/mt cfr on Wednesday from the prior day.
Traders indicated that most mills preferred domestic scrap for immediate requirement and due to container shortage and vessel delays preferred to negotiate for bulk scrap from Japan. Mills are also closely watching South Korean purchases post Kanto tender to gauge price direction.