Ferrous Market Update 11/06/2020
- The daily Davis Index for Turkish imports of US-origin HMS 1&2 (80:20) rose by $1.12/mt on Friday after several bookings were reported.
- Turkish steelmakers purchased around 15 deep-sea ferrous scrap cargoes this week, according to market participants, fulfilling significant tonnage requirements of the material for December shipment. Most transactions were fixed at around $296/mt cfr for HMS 1&2 (80:20) from the USA and the Baltic region.
- The daily spot rebar prices in Turkey increased by TRY20-40/mt ($2-5/mt) ex-works, including 18pc VAT, on Friday amid the Turkish lira’s depreciation against the US dollar.
- The daily exported rebar prices remained at $455-460/mt fob. Turkish mills are firm on pricing because their orders books are almost full. According to market sources, there was a new rebar sale to Asia, but further details were not available at the time of publication.
- Billet prices in the Turkish domestic market went up to $430-435/mt ex-works, while some sales were reported at $425-430/mt ex-works during the first week of November. ($1=TRY8.58)
- The weekly Davis Index for Turkish DKP scrap (equivalent to auto bundles) rose by TRY78/mt ($9/mt) on Monday after most mills decided to increase their purchase prices due to a significant devaluation of the Turkish lira against the US dollar.
- Purchase prices for shipbreaking scrap in Izmir remained unchanged. ($1=TRY8.41)
- The weekly Davis Index for HMS 1&2 (80:20) increased by $3/mt fas Baltic Sea and by $1/mt fas Black Sea on Monday as buyers in the export market accepted higher prices.
- An exporter from St Petersburg closed a deal with an Iskenderun-based mill at $292.50/mt cfr for 9,000mt of HMS 1&2 (80:20), along with 8,000mt of shredded scrap at $297.50/mt cfr and 4,000mt of bonus material at $302.50/mt cfr. The cargo is due for shipping before Dec 5. The seller plans to supply shredded scrap to Turkey after acquiring a new yard with equipment that includes a shredder, slated to be restarted in November.
- An exporter from Rostov-on-Don reached an agreement with a Karadeniz-based mill at $292/mt cfr for around 3,000mt of A3 material.
- Collection prices ticked up in Russia on recent sales. The weekly Davis Index for HMS 1&2 (80:20) climbed by RUB75/mt ($1/mt) del St Petersburg dock on Monday and rose by RUB700/mt ($9/mt) del Rostov-on-Don dock. ($1=RUB80.48)
- The weekly Davis Index for HMS 1&2 (75:25) in the ARAG region was unchanged on Tuesday due to a lack of deals.
- European ferrous scrap collectors did not revise dockside prices early in November amid suspended trading in the bulk export market. Negotiations with Turkish importers were paused after active bookings in the second half of October. (€1 = $1.17)
- Davis Index’s weekly north and south UK HMS 1&2 (80:20) ferrous scrap indices crept up by £1-2/mt delivered dockside, on Nov 3.
- UK dockside ferrous scrap purchase prices edged up as trades narrowed over the past week, with indications that prices may continue to rise as fundamentals tighten.
- Market participants were focused on monthly mill-yard negotiations, with one large UK smelter making an opening bid at £5/mt higher than last month, which was swiftly rejected by some merchants.
- Simultaneously, most ferrous scrap dealers expect inflows of material to dry up as the UK enters an initial month of COVID-19 lockdowns to stem the transmission of the pandemic. Irrespective of demand from major seaborne trade routes, this will likely be a sufficient factor in driving dockside purchase prices higher as exporters battle to secure volumes.
- The weekly indexes for north and south UK OA (Plate & Structural) edged up by £2/mt delivered dockside on Nov 3.
- Davis’ north and south UK 5A/5C (frag feed) ferrous scrap indexes were unchanged over the past week. (£1 = $1.30)
- Davis Index’s weekly northern Spain HMS 1&2 (80:20) and shredded small bulk ferrous scrap indices remained unchanged on cfr basis on Friday.
- A Spanish trader commented that while there was clearly strength in major seaborne trade routes, local mills have been unable to accept higher prices given weak steel fundamentals and margins.
- For most of 2020, Spanish steelmakers have largely been able to lean on relatively healthy domestic supply availability as a valve to release the occasional “heat” in import prices.
- More recently, however, spreads between domestic and import benchmarks have begun to narrow as local suppliers have been heard to be exporting larger volumes.
- Meanwhile, Davis Index’s UK small bulk ferrous scrap HMS 1&2 (80:20) and shredded were also flat compared with the prior week on fob basis on Nov 6. (€1 = $1.19)
- Davis Index’s monthly Spanish consumer ferrous scrap indices increased by €10/mt ($12/mt) delivered mill following the conclusion of recent deals in early November.
- Spanish steel producers are leaning heavily on local ferrous scrap supplies given the material arbitrage between domestic and import benchmarks.
- A Spanish ferrous scrap buyer noted that domestic suppliers had been increasingly looking towards export markets where they were able to achieve higher prices.
- As a result, the domestic E3 ferrous scrap grade discount to imports of HMS 1&2 (80:20) narrowed to €5/mt del in early November from €7/mt del in the prior month.
- That said, local supplies are priced relatively competitively given that Spanish mills still need to add a transportation fee from port to plant for imported material.
- The Davis Index indices for E1 (old thin), E3 (old thick), and E40 (shredded) increased €10/mt across all grades delivered to mill. (€1 = $ 1.19)
- US East Coast and Houston ferrous scrap dock collection prices trended sideways amid weak export activity.
- Dockside prices on the East Coast ticked up in small increments on Tuesday as significant tonnage needed to be fulfilled on the flurry of export orders from last week. Material needed to fill prior orders held dock prices steady until domestic trading formally began on Thursday.
- In Boston, the weekly Davis Index for export yard HMS 1&2 (80:20) and P&S 5ft ticked up by $1/gt delivered Boston dock. Shredder feed moved up by $3/gt delivered.
- The weekly Davis Index for export yard buying prices in New York climbed by $5/gt for HMS 1&2 (80:20) and P&S 5ft. Shredder feed rose by $6/gt delivered.
- In Philadelphia, the index for export yard collection prices of HMS 1&2 (80:20) and P&S 5ft increased by $5/gt delivered Philadelphia dock. The index for shredder feed climbed $9/gt delivered.
- In Houston, the weekly Davis Index was flat for HMS 1&2 (80:20) and Shredder feed. P&S 5ft fell $2/gt delivered.
- US West Coast ferrous scrap dock prices remained unchanged in San Francisco, Los Angeles, and Portland this week despite strong fundamentals. Los Angeles docks may increase prices later in the month as the market develops.
- Demand for bulk and containerized scrap is strong in Bangladesh, Pakistan, and India, where mills are willing to pay higher imported prices. As a result, offers from Australia, the US, UK, UAE, and Latin America firmed up to these destinations on rising inquiries.
- US scrap yards continue reporting low incoming feedstock and tight processed scrap inventories at docks. Fewer demolition projects resulted in lower volumes of quality structural and cut grades in larger tonnages. Regional docks are also competing with demand via containers to Asia and Mexico.
- The weekly Davis Indexes in Portland were flat for the second consecutive week for HMS 1&2 (80:20), P&S 5ft, and Shredder feed.
- Docks did not alter prices in the area on expectations of status quo against October scrap settled prices by mills and strong but relatively leveled export demand.
- The weekly Davis Indexes in Los Angeles were unchanged this week after a robust increase last week as docks did not change list prices but paid higher prices for premium loads.
- US containerized ferrous scrap indices increased for the third consecutive week on strong demand from Asian buyers.
- Recovering activities in their domestic markets have prompted Asian buyers to continue buying imported scrap. Although uncertainty around a potential second wave of COVID-19 shutdowns looms, Asian mills’ schedules are recovering as stimulus packages are rolled out and infrastructure projects gain focus.
- The current strength of the hot-rolled coil (HRC) and cold-rolled coil (CRC) prices in China, Turkey, and the CIS region is supporting expectations of limited dumping flows and overall dynamic demand throughout influential trade flows into Asia.
- Indian and Pakistani buyers remain active and Bangladeshi buyers will return to the market in November for January buys as most mills have sufficient volumes at present. However, buyers from these countries are also contending with higher container freight charges.
- Some Vietnamese mills recently negotiated bulk scrap deals and could return to containerized markets later in the year.
- US containerized scrap prices are being supported by diminishing inventories and rising prices in buyers’ local markets.
- Asian buyers have increased their interest in US containerized ferrous scrap despite higher prices as Japanese and Russian export scrap inventories tighten.
- Tight scrap inventories, solid production improvements at US mills, continued orders on HRC and CRC at higher prices, strong rebar sales, firm iron prices, and active export interest is expected to support US containerized prices into November. Most market participants expect a strong market through November and December.
- The weekly Davis Indexes in New York increased across all grades for the second consecutive week with the index for HMS1&2 (80:20) and shredded rising by $5/mt fas.
- In Los Angeles, the Davis Indexes also improved across all grades for the third consecutive week. HMS 1&2 (80:20) and shredded increased by $9/mt fas, #1 busheling rose by $12/mt fas and P&S 5ft climbed by $7/mt fas.
- The Davis Indexes in San Francisco for HMS 1&2 (80:20) rose by $12/mt fas as the same grade in Seattle increased by $14/mt fas.
- The domestic ferrous scrap trade for November formally commenced on Thursday after Detroit area mills announced no change from October’s settled prices for all grades.
- The surrounding Midwest markets have been transacting since the beginning of this week at flat pricing on secondary grades with some transactions for prime grades such as #1 busheling at prices up $10-25/gt in the Southeast region.
- Some sellers believe that limited tons of material will move at last month’s pricing levels as several mills are still experiencing delays on their October scrap orders.
- The Illinois River has been closed for major overhauls since July, delaying orders for companies in or near Chicago, a manufacturing hub dependent on barge transport. Normal business on the river will restart in November easing some burden for recyclers.
- Movements originating at the New Orleans, Louisiana (Nola) port heading north to the Chicago area resumed barge business in October, while southbound hauls from the city are projected to continue by early November. Shipments via barge may reach destinations by the end of November.
- The recovery activity and increased offer prices on hot-rolled coil (HRC), cold-rolled coil (CRC), and rebar in the US, Turkey, Taiwan, South Korea, and other Asian markets, is expected to buoy global scrap prices and ongoing demand. Mexican flat steel prices have also continued rising on higher offers. Mexican buyers were actively sourcing scrap from Texas, Southwest, and the West Coast this week.
- Given the predominant flat status in November, market participants are forecasting a strong sideways to upwards price movement in early December. The upward pricing is expected to reflect in January trading if the rise in scrap prices does not fully materialize in December due to end-of-year accounting and inventory management concerns by mills.
- Mills will continue fulfilling orders on strong recovery and capacity utilization in December while the winter season and holidays will limit feedstock and available processed scrap. Moreover, the scrap market could be supported by strong demand via bulk and containers in the export market.
- Domestic ferrous scrap prices in Mexico increased for most grades amid strengthening demand for scrap from the automotive and manufacturing sectors in the Central and Bajío regions.
- However, scrap import volumes could get impacted due to the depreciation of the Mexican peso against the US dollar, depending on the results of the US presidential election.
- In North Mexico, the weekly Davis Indexes for HMS 1&2 (80:20), P&S 5ft, and shredded all rose by MXN50/mt delivered Mexico consumer while #1 busheling climbed by MXN300/mt and machine shop turnings remained unchanged.
- The weekly Davis Indexes in Bajío for HMS 1&2 (80:20) and shredded rose by MXN25/mt delivered Mexico consumer, while #1 busheling climbed by MXN300/mt delivered. The indexes for P&S 5ft and machine shop turnings remained unchanged.
- Scrap prices in Bajío and Central areas climbed this week across most of the grades amid high demand in the market. Prices of HMS 1&2 (80:20) in Central Mexico may rise further as demand strengthens and the supply of the grade remains tight.
- In Central Mexico, the weekly Davis Indexes for P&S 5ft, machine shop turnings, and #1busheling all increased by MXN100/mt delivered Mexico consumer. HMS 1&2 (80:20) rose by MXN150/mt delivered and shredded climbed by MXN200/mt delivered on Friday. ($1=MXN20.55)
- Tokyo Steel raised ferrous scrap prices by JPY1,000/mt ($9.6/mt) for all grades of ferrous scrap this week, except at the Utsunomiya plant. On Thursday, the steelmaker hiked prices by JPY500/mt for the second time in a week. Offers for #2 HMS were at JPY28,000/mt ($269/mt) delivered Tahara, Kyushu, and Okayama plant.
- Market participants expect global scrap prices to rise further on increased buying by Turkish importers. Scrap exporters raised offers despite limited deals in anticipation of an improvement in domestic scrap demand.
- Deals for #1 busheling (Shindachi) were heard cfr Vietnam this week. The weekly Davis Index for the grade rose by JPY1,875/mt fas from the prior week amid limited deals.
- In the export market, the weekly index for #1 busheling (Shindachi) rose by JPY2,068/mt fob Japan. Hyundai bid for Japanese #1 busheling (Shindachi) scrap on Wednesday, but no deals were heard. Bids for #1 HMS were at JPY29,500/mt. No bids for #2 HMS were heard.
- In the Kanto region, the Davis Index for #2 HMS increased by JPY500/mt. Bids were heard at JPY27,500/mt fas. The index for the grade rose by JPY648/mt fob Japan. Traders expect Japan export prices to increase further amid better demand.
- The weekly index for shredded rose by JPY2,275/mt fas. Hyundai’s bids were heard at JPY32,000/mt fob. South Korean mills focused more on bulk cargo deals, which are priced lower than containerized scrap due to which Hyundai raised bids by almost JPY2,500/mt fob from Oct 16.
- Yards offered Japanese HMS 1&2 (50:50) on Wednesday up by $10/mt from the prior week, but no deals were heard. The index for the grade rose by $9/mt cfr Taiwan. The index for the same grade increased by $7/mt cfr Vietnam, with no trades heard. Few trades were heard for HMS 1&2 (80:20) of US-origin cfr Vietnam in containers.
- Traders are optimistic about recovery as steelmakers may ramp-up production in most Asian countries amid a gradual rise in demand from infrastructure and auto sectors.
- Export offers could increase further on rising domestic demand and global cues. ($1= JPY104.6)
- South Korea’s containerized imported ferrous scrap tags rose this week on higher offer prices. Demand, however, remains under pressure with mills holding good levels of scrap inventories.
- The weekly Davis Index for containerized HMS 1&2 (80:20), Wednesday, increased by $10/mt cfr, with no deals heard at the index price.
- Mills preferred to negotiate for Japanese bulk scrap over higher-priced US-origin material. Deals for Japanese shindachi were heard with Korean mill Seahbe and Hyundai steel purchasing different grade mix at current #2 HMS price, while no #2 HMS was bought. Korean mills have started restocking before offers rise further.
- In the short term, mills expect finished steel export and domestic demand to recover, aided by billet exports to other Asian countries. Bids for billets rose by $10/mt on Wednesday to cfr Southeast Asia. Increased imports by Chinese buyers could raise demand for billets in the coming weeks.
- The weekly Davis Indexes for P&S 5ft, #1 HMS, and shredded rose by $10/mt, $11/mt, and $11/mt cfr South Korea, respectively.
- South Korean domestic ferrous scrap prices trended up this week. Hyundai, Posco, and other Korean steel mills hiked domestic scrap prices by KRW10,000/mt ($8.8/mt) for Pohang this week as rising imported scrap offers push prices higher.
- The Davis Index for domestic Heavy A, Tuesday, settled flat delivered Incheon, and rose by KRW10,000/mt delivered Pohang mill, respectively, with deals heard at the index price. Most mills preferred lower-priced Light A scrap with the weekly Davis Index for domestic Light A rising by KRW10,000/mt delivered Pohang mill. Trades for the grade were reported at the index price. ($1=KRW1,132)
- Feng Hsin raised rebar and scrap prices by TWD300/mt on Tuesday. This is the second raise in two weeks due to increasing imported scrap prices and a shortage of ferrous scrap in the domestic market. Market participants indicated that mills had to raise rebar prices to offset higher scrap prices. Feng Hsin’s base offers for rebar were at TWD15,200/mt ex-works.
- The weekly Davis Indexes for domestic HMS 1&2 (80:20) in South and North Taiwan rose by TWD300/mt ($10.5/mt) delivered southern and northern mill, respectively. Offers increased on firm global scrap prices and domestic ferrous scrap shortage.
- The Davis Index for containerized US-origin HMS 1&2 (80:20) increased by $2/mt on Friday cfr Taiwan from the prior day and rose by $13/mt from the prior week (Oct 28). A few deals were heard throughout the week at rising prices.
- Finished steel prices rose for the third consecutive time in three weeks and are likely to rise further to offset increased input costs.
- The Davis Index for US-origin HMS 1&2 (80:20) in Turkey rose by $10/mt on Wednesday from Oct 16. While demand is limited, rising offers are pushing ferrous scrap prices up.
- The weekly Davis Indexes for containerized P&S 5ft, #1 HMS, shredded and #1 busheling rose by $15/mt, $9/mt, $13/mt, and $15/mt cfr, respectively. ($1=TWD28.6)
- In China, Shagang Steel raised finished steel prices for November deliveries, which impacted ferrous scrap prices. The weekly Davis Index for the HMS 1&2 (80:20) increased by CNY60/mt delivered mill. Scrap prices might rise further, driven by an increase in demand for billets in the domestic market.
- Prices for Q235 150mm square billets in Tangshan rose by CNY60/mt ex-works, including 13pc VAT as some mills cut production to comply with anti-pollution norms. Small rebar manufacturers resumed production after pausing operations for a fortnight on a winter pollution alert. ($1=CNY6.7)
- In the containers market, the weekly index for US-origin HMS 1&2 (80:20) increased by $1/mt cfr. Sellers largely stayed away from the Vietnamese market as bids by other Asian countries were more lucrative.
- Mills, on the other hand, negotiated for Japan and US-origin material in bulk while containerized trades took a backseat. Japanese ferrous scrap export prices also started rising this week, limiting trades.
- The weekly index for both P&S 5ft and shredded rose by $4/mt cfr on Thursday. As per traders, Vietnamese mills are inquiring for higher grades scrap. Offers for P&S 5ft in FEU were at $320/mt with no buyers at those levels. Offers for US-origin HMS 1&2 (80:20) were at $295-300/mt, but buyers stayed away.
- In the containers market, prices for #1 busheling rose by $3/mt cfr from a week ago, and offers of $325/mt cfr in TEU were unacceptable for buyers.
- Japanese suppliers offered HS and shredded in the bulk market on cfr basis, but no deals were heard this week. Offers for Japanese #2 HMS were at JPY28,500-29,000/mt ($275-279/mt) fob on Tuesday and are expected to rise amid increasing Japanese domestic scrap prices.
- The weekly Davis Index for domestic HMS 1&2 (80:20) was flat this week delivered South Vietnam inclusive of taxes, with limited deals heard at the index price. The domestic market came to a standstill this week due to Typhoon Goni and the flood in central Vietnam. Logistical issues caused by the storm forced mills to delay buying.
- Suppliers were not interested in accepting lower bids for bulk shipments. In the bulk market, no deals were confirmed on Tuesday due to the storm alert and a public holiday in Japan. Offers for Japanese #2 HMS were at JPY28,500-29,000/mt on Tuesday. Containerized import volumes did not rise as Vietnamese mills focused on bulk purchases. ($1=VND23.1)
- Indonesian mills were unable to book material this week amid high US-origin offers. Market participants are expecting scrap prices to rise further next week. The difference between offers and bids in Indonesia is currently around $10/mt cfr. The weekly Davis Index for HMS 1&2 (80:20) rose by $11/mt cfr Jakarta.
- The indexes for P&S 5ft and #1 HMS rose by $6/mt and $7/mt cfr Jakarta, respectively. No deals were heard this week.
- The weekly Davis Index for #1 busheling, shredded scrap rose by $7/mt, and $2/mt cfr Jakarta, respectively. Offers for #1 busheling from Malaysia and Singapore were at $350/mt cfr, while bids were at $335/mt cfr. Traders expect Indonesian mills to raise bids next week.
- Billet imports into the country could reduce with the extension of the scrap registration deadline. Traders are offering billets at $460-465/mt cfr Southeast Asia made in blast furnaces, with no deals reported.
- The weekly Davis Index for domestic HMS 1&2 (80:20) was unchanged delivered Rayong mill inclusive of taxes but rose $2/mt due to the depreciation of the Thai Baht. Deals were heard for the grade at the index price.
- A few trades for South American HMS 1&2 (80:20) this week lifted offer prices. Deals were also heard for P&S 5ft on Tuesday. But sluggish domestic steel demand is still a cause of concern for many Thai mills.
- Scrap demand could dip in the coming days as mills have enough inventories to fulfill their immediate production requirements. ($1=THB31)
- The weekly indexes for HMS 1&2 (80:20) were flat delivered western mills and eastern mills including taxes. Malaysia has extended its pandemic-related lockdown till Nov 10, leading to subdued steel demand. Mills are thus likely to delay scrap purchases.
- Still, offers for US-origin HMS 1&2 (80:20) rose by $10/mt cfr following bullish global cues.
- Imported scrap prices in East and Southeast Asian markets rose from the prior week. With US-based suppliers raising offer prices despite limited demand, most Asian buyers have turned cautious. ($1=MYR4.16)
- Indian steel mills continued active inquiries and trades for imported scrap amid a scarcity of HMS offers this week. Prices maintained an uptrend for the third successive week and hit a 16-month high. Firm demand from downstream industries and a faster-than-expected recovery in India’s steel sector is likely to continue over the next few months.
- The Davis Index for containerized shredded on Friday cfr Nhava Sheva, moved up by $0.92/mt from Thursday and rose by $8.17/mt from the prior Friday. Major stainless-steel makers and alloy makers continued restocking materials despite high prices, though scrap demand from secondary steel mills remained weak.
- South African HMS suppliers are still unable to export due to permit issues and only a few yards are operating in West Africa. Australian suppliers prefer to sell to Bangladesh. Indian buyers avoid US and UK-origin HMS materials on quality concerns and due to longer delivery period.
- The daily Davis Index for UAE-origin HMS 1&2 (80:20), Friday rose by $7/mt from the prior week with deals by Jalna-based EAF makers.
- Recovering demand and price of billets in the export markets, especially China, is expected to lift the sentiments of billet exporters.
- In northern India, many importers’ scrap consignments are delayed due to the disruption of rail services. Few mills opted for domestic scrap as a stopgap measure. Mills have urged the state governments to resume rail services on the Mundra port to Punjab route.
- There were hardly any offers for turnings, while P&S cfr Nhava Sheva traded in thin quantities with the Davis Index rising by $5/mt from the prior Friday. ($1=Rs74.11)
- The uptrend in ferrous scrap prices in the domestic market halted on Friday. Ingot prices in Mandi Gobindgarh declined by Rs200/mt, weighing down scrap prices. Still, a shortage of material amid logistical issues due to the ongoing protests in Punjab cushioned prices from falling.
- The daily Davis Indexes for HMS 1&2 (80:20) settled flat delivered Mandi Gobindgarh and Mumbai mills. But from a week ago, the indexes for HMS 1&2 (80:20) rose by Rs1,000/mt ($13.48/mt) del Mandi Gobindgarh and by Rs450/mt ($6.06/mt) del Mumbai.
- Imported scrap offers in Pakistan remained firm despite tepid domestic steel demand. Limited trades were heard this week as the market in Pakistan remained quiet compared to other subcontinental markets.
- The Davis Index for containerized shredded on Friday rose by $4.68/mt from the prior week. EU/UK suppliers raised their offers for shredded following strengthening global cues as offers climbed to a 16-month high.
- Some offers for P&S sarya scrap from the UAE were at $325/mt cfr Port Qasim, but buyers were not keen on purchasing this grade because like HMS it is taxed higher in comparison to shredded. The Davis Index for UAE-origin HMS 1&2 (80:20) cfr Port Qasim increased by $7/mt from the prior Friday.
- Pakistani recyclers have turned active for scrapped ship imports, as indicated by increased inquiries in the market. Rolling scrap supplies could ease in December when melting scrap supplies dry out.
- Mills can offer rebars at lower prices as their input cost would go down following a reduction in power tariffs announced this week. In the domestic market, Bala billet prices ex-works Punjab rose by PKR1,000/mt ($6.28/mt) from the prior week amid recovering demand. Trades for the product resumed as demand from the downstream industries showed signs of recovery. In Punjab, G-60 rebar prices ex-works fell by PKY500/mt ($3.14/mt) from the prior week.
- Pakistani currency continued to appreciate to touch PKR160 against the US dollar for the first time in the last five months, this could aid imports.
- The index for Pure Q toke scrap equivalent to shredded rose by PKR500/mt ex-works Lahore, Friday, from late last week in line with higher imported scrap prices. ($1=PKR159.39)
- Imported ferrous scrap prices in Bangladesh jumped this week amid stable demand. The domestic steel market showed signs of recovery as major steel-consuming sectors have started regaining momentum. Mills raised finished steel prices to offset high input costs.
- A shortage of containers, mainly due to a mismatch between imports and exports, has also increased the landed cost for many scrap importers.
- In the bulk market, Japanese suppliers lifted offers for higher grade scrap up by JPY1,000-1500/mt ($13.50-$20.25/mt) from the prior week.
- The Davis Index for containerized shredded, Friday, was up by $10.79/mt cfr Chattogram from the prior week. Suppliers are eager to raise offers above $350/mt cfr Chattogram next week.
- Brazilian P&S scrap in containers traded $10/mt higher than the prior week. The weekly Davis Index for busheling rose by $6/mt cfr Chattogram with no major deals reported amid a supply crunch.
- The weekly Davis Index for containerized US-origin HMS 1&2 (80:20) Friday rose by $5/mt cfr Chattogram from the prior week. No major deals were reported as the delivery period is very high for buyers.
- Australian suppliers preferred to sell HMS containers to Bangladesh and Indonesia, where buyers accepted their prices and withdrew offers for the Indian market.
- The weekly Davis Index for domestic billet Friday ex-works Chattogram increased by BDT1,125/mt ($14.45/mt), with trades at the index price. Large steel producers like BSRM and AKS offered rebar higher, with the index rising BDT750/mt ex-works.
- Ship scrap prices increased this week in sync with rising domestic scrap prices and low inventory at yards as fewer ships arrived for beaching during the last few weeks. Domestic shipbreaking scrap equivalent to P&S traded ex-yard Chattogram rose by BDT1,250/mt ($14.75/mt) from the prior Friday. Offers for scrapped vessel imports were stable, with indications of increased arrivals till the end of the year, if supplies remain stable. ($1= BDT84.93)
- The weekly Davis Index for CIS basic pig iron rose by $5/mt fob Black Sea basin on Friday on active trading in Asia.
- Demand for pig iron increased significantly in China in the first week of November amid firm steel product markets, which resulted in CIS suppliers achieving higher deal prices. A Russian exporter sold 55,000mt of pig iron from the Black Sea basin to China at $405/mt cfr, while a few days earlier CIS material from traders changed hands at $395-400/mt cfr.
- The same Russian producer sold 15,000mt of pig iron from the Far East to Taiwan at $405/mt cfr.
- The weekly Davis Index for CIS pig iron in Italy increased by $8/mt as suppliers, who were bullish after selling out for December shipment, raised offers to $390/mt cfr referring to uptrends in alternative outlets. There were no deals reported in Italy as bids did not exceed $375/mt cfr.
- The weekly Davis Index for basic pig iron (BPI) remained unchanged at the New Orleans port on Thursday as markets awaited more cues from domestic scrap trading that is developing at mostly flat prices.
- Industry participants are also anticipating election results and are trying to factor in its impacts on the scrap market. However, the domestic and metallic import markets remain firm in November, which will hold pig iron and other scrap substitutes’ prices steady.
- The most recent BPI bookings from the CIS to the US stand at $373-377/mt cfr Nola, after several bookings concluded towards the end of October. The succeeding deals are expected to settle with less volume but higher prices.
- The current offers to the US from CIS producers continue at $385-390/mt cfr Nola, for December or January shipment.
- Offers from Brazil to China were at $375/mt fob on Thursday, which compares to about $395/mt cfr Nola. These levels represent a $5/mt increase compared to last weeks’ offers at $370/mt fob.
- The Davis Index for nodular pig iron (NPI) imports was flat. The availability of the material remains limited and the grade is being offered into the US market at around $440/mt cfr Nola or above, for December shipment.
- The weekly Davis Index for US hot briquetted iron (HBI) imports is unchanged.
- Sponge iron prices are gathering steam amid a shortage of iron ore over the past few months. Mining operations are yet to return to normal levels after the rainy season, but mills suggest the situation could turn around by mid-December.
- In Mandi Gobindgarh, the index for Sponge iron rose by Rs600/mt ($8.10/mt) from Thursday and by Rs1,300/mt ($17.55/mt) del mill since Oct 30. In Mumbai, the index increased by Rs50/mt in a day, and by Rs1,100/mt delivered mill in a week. ($1=Rs74.15)
India finished steel
- The daily Davis Index for billet in Mumbai rose by Rs900/mt ($12.13/mt) from the previous Friday in-line with a rise in rebar prices. The price increase was also supported by a $5-10/mt rise in imported scrap prices. The index for rebar moved up by Rs800/mt ($10.78/mt) due to healthy demand.
- In Raipur, the daily index for billet rose by Rs1,000/mt ($13.48/mt) from the previous Friday amid a surge in sponge iron prices. However, the daily index for rebar was up Rs300/mt ($4.04/mt) amid sluggish demand for finished steel.
- In Mandi Gobindgarh, the daily index for ingot increased by Rs400/mt ($5.39/mt) from the previous Friday with a similar rise in local scrap prices.
- The index for billet in Jalna rose by Rs800/mt ($10.78/mt) on Thursday from last week due to an increase in local scrap prices supported by strong demand. The bi-weekly index for rebar surged by Rs900/mt ($12.13/mt) on steady rebar sales.
- Shipbreaking prices rose on Friday, compared to the prior week amid a rise in demand from the rolling mills in Mandi and Gujarat. The daily Davis Index for HMS attachments and Melting increased by Rs600/mt ($8.04/mt) on Friday over the prior week with trades at the index price.
- The daily Davis Index for 4Ani rose by Rs50/mt, while the index for 6Ani remained unchanged, compared to the prior week. The index for 14Ani also held from the prior week with transactions reported at the index price.
- Demand for plates picked up as mills ramped up production amid an uptick in demand from infrastructure and construction sector. The index for 1kg plate increased by Rs500/mt, while the index for 2kg rose by Rs150/mt.
- Shipbreakers expect the prices to increase further as buyers in Mandi looks to purchase big quantities ahead of the festive season.