Ferrous Market Update 10/09/2020
- The daily Davis Index for Turkish imports of US-origin HMS 1&2 (80:20) slid by $0.58/mt on Friday after a new sale was reported.
- Turkish mills achieved further price decreases for ferrous scrap and continued booking cargoes, with a Marmara-based mill buying 38,000mt of HMS 1&2 (80:20) at $283/mt cfr and 2,000mt of P&S 5ft at $293/mt cfr from a US supplier.
- In short-sea cargoes, Romanian-origin HMS 1&2 (80:20) sold at $270-271/mt cfr Turkey. A cargo of the same material was traded to Greece at $275/mt cfr.
- Rebar trading remained sluggish in the Turkish market with the daily domestic spot rebar prices unchanged at TRY4,110-4,150/mt ex-works, including 18pc VAT, on Friday, while the daily exported rebar prices moved to $445-450/mt fob. ($1 = TRY7.86)
- The weekly Davis Index for Turkish DKP scrap increased by TRY40/mt on Monday and climbed by TRY8/mt for extra grade scrap.
- A few Turkish mills decided to raise their purchase prices for local material, considering their needs and currency fluctuations, while others kept them unchanged.
- The weekly Davis Index for HMS 1&2 (80:20) from Russia dropped by $13/mt fas Baltic Sea and by $11/mt fas Black Sea on Monday amid strong negative sentiment in the export market.
- No sales were reported towards September-end, October-beginning due to sluggish demand from foreign outlets. Turkish mills, the key buyers, remained inactive in anticipation of prices dropping to $280-285/mt cfr for HMS 1&2 (80:20) from St Petersburg and Rostov-on-Don.
- Russian docks collection prices fell with the weekly Davis Index for HMS 1&2 (80:20) decreasing by RUB625/mt ($8/mt) in St Petersburg dock on Monday and by RUB600/mt ($8/mt) in Rostov-on-Don dock. ($1 = RUB78.28)
- The weekly Davis Index for HMS 1&2 (75:25) in the ARAG region dropped by €5/mt ($6/mt) on Tuesday amid negative export market sentiment.
- Dutch and Belgian ferrous scrap suppliers decreased collection prices due to sluggish sales. Turkish importers insisted on lower prices. Most exporters refused to sell, but they chose to be cautious and cut dockside prices. (€1 = $1.18)
- Davis Index’s weekly north and south UK HMS 1&2 (80:20) ferrous scrap indices both edged lower by £3/mt ($4/mt) on Tuesday.
- Ferrous scrap benchmarks on major seaborne trade routes, particularly to Turkey, have weakened in the past week, but UK merchants have been more resolute with bulk processors.
- One UK-based trader commented that some local merchant suppliers had become “irrational” and “greedy” after five consecutive months of relative price strength. Another trader noted that one large UK ferrous scrap processor had already pushed through cuts of £5/mt for HMS 1&2 (80:20) ferrous scrap grades. The same trader hypothesized that a large fire at a scrap metal yard at Avonmouth Docks, leading to the closure of the port, could provide the impetus to push through discounts elsewhere.
- The weekly indexes for both north and south UK OA (Plate & Structural) declined by £10/mt on Oct 6.
- Davis Index’s north and south UK 5A/5C (frag feed) ferrous scrap indexes both declined by £5/mt 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 declined by €3/mt ($4/mt), respectively, on Friday.
- Spanish ferrous scrap import benchmarks nudged lower over the past week, as suppliers conceded modest discounts in the latest round of negotiations.
- One ferrous scrap trader commented that Spanish import prices had failed to climb relative to major seaborne benchmarks at their peak and by that virtue, the downside has been limited by comparison.
- Davis Index’s UK small bulk ferrous scrap HMS 1&2 (80:20) and shredded were unchanged on Oct 9. (€1 = $1.18)
- The ferrous scrap trade for October wrapped up by Friday, posting largely unchanged prices for most grades in certain areas and slightly downward or upward movements, for several categories in other regions.
- The markets largely reinstated unchanged prices in regions like Detroit, though slackened export demand brought softened prices along the East Coast down to the Southeast. Despite the soft trends in some deals, mills did not cancel higher-priced September orders in any region and are allowing scrap yards to ship those orders prior to the new contracts.
- Certain Midwest areas gained some degree of upward prices for cut grades such as P&S 5ft, where demand was stronger. Premiums paid in September in some Midwest pockets also carried over a bullish tone.
- In Philadelphia, the Davis Index for #1 busheling and other prime materials was flat while HMS 1&2 (80:20), P&S 5ft, shredded, and other cut grades ticked down by $4-7/gt delivered mill. Local business in the region was limited.
- The index for #1 busheling rose by $6/gt delivered mill in the Chicago market. Cut grades also produced some growth with the Davis Index for HMS 1&2 (80:20) rising by $11/gt, P&S 5ft up by $6/gt, and shredded rising by $7/gt delivered mill.
- The inclines in Chicago were due to improved demand for those grades, along with market corrections that follow higher starting points arising from several late-trade quiet deals in September.
- The base price for P&S 5ft and shredded covered a portion of tonnage needs, which were supplemented by an additional $10/gt or more by Thursday, to meet full mill requests.
- In Carolina, the Davis Indexes mostly decreased with HMS 1&2 (80:20) slipping by $2/gt, machine turnings declining by $5/gt, and P&S 5ft and shredded both decreasing by $1/gt delivered mill. The #1 busheling index increased by the $1/gt.
- Within the region, deals that had achieved a premium, especially springboard ones, were reported with price declines of $5-10/gt on shredded scrap.
- The scrap markets in Texas settled predominantly sideways as #1 busheling decreased by $2/gt delivered, HMS 1&2 (80:20), P&S 5ft, and shredded remained unchanged and machine turnings slipped by $1/gt delivered mill.
- Looking towards November, shredded scrap inventories that were unable to be placed due to the initial expectation of higher-end pricing achieved in September, are pointing towards an overhang next month. By the time yards adjusted offers downwards in such cases, mills had met their buying quotas.
- Scrap flows into yards are considered sufficient against lower mill demand levels compared to a year ago, but scrap sellers warn that given the restricted economic activity, flows are still limited. Many scrap yards sought to clear inventories and are not in a hurry to build back volumes, given the risk of soft November pricing.
- Finished steel has seen some hard-fought gains over the past one-and-a-half month, with HRC up by about $200/mt against early August prices. Thus, several market participants expressed the possibility of sideways pricing into November and December if adequate export demand is maintained.
- US East Coast and Houston ferrous scrap dock collection prices dropped for the second consecutive week amid sluggish demand and rising material flows.
- Dockside prices on the East Coast have fallen by approximately $15/gt or more since Sep 22, following a month-long downward export sentiment. However, negotiations for October bookings to Asian destinations resumed cautiously on Tuesday.
- Turkish bids for US exports of HMS 1&2 (80:20) were around $283-286/mt cfr compared to $290/mt cfr on Sep 29. Offers from the US on Tuesday remained unchanged at $290/mt cfr.
- Market participants feel prices have bottomed for October though demand on the East Coast has been relatively weak.
- In Boston, the weekly Davis Index for export yard HMS 1&2 (80:20) moved down by $9/gt delivered dock. P&S 5ft dropped by $7/gt delivered and shredder feed by $2/gt.
- The weekly Davis Index for export yard buying prices in New York declined by $9/gt delivered for HMS 1&2 (80:20), by $10/gt for P&S 5ft, and by $7/gt delivered for shredder feed.
- In Philadelphia, the index for export yard collection prices of HMS 1&2 (80:20) ticked down by $8/gt delivered, and both P&S 5ft and shredder feed fell by $7/gt delivered Philadelphia dock.
- The weekly Davis Indexes in Houston decreased by $10/gt for HMS 1&2 (80:20) and by $12/gt for P&S 5ft. Shredder feed dropped by $9/gt delivered.
- US West Coast ferrous scrap dock price indexes declined in Los Angeles, Seattle, and Portland on Tuesday.
- Turkish mills postponed import scrap activity for weeks due to low rebar sales, only to return with lower-priced bids.
- Asian scrap buyers were quiet due to weak domestic finished steel prices and concern for a strong regional competition that may severely hamper profitability.
- The weekly Davis Indexes in Portland decreased after trending flat last week. HMS 1&2 (80:20) and P&S 5ft indexes slipped by $4/gt delivered and shredder feed declined by $5/gt delivered.
- On Oct 5, at the start of the domestic ferrous trade, regional mills in the Pacific Northwest offered scrap buying programs at sideways prices. At the same time, docks lowered their prices, thereby lowering the indexes, but could reinstate the former price levels to maintain equilibrium with domestic mill demand.
- In San Francisco, the weekly indexes decreased further after slipping by $4-7/gt last week. HMS 1&2 (80:20) declined by $2/gt, while P&S 5ft and shredder feed were down by $1/gt delivered.
- The weekly Davis Indexes in Los Angeles declined after a flat trend throughout September. HMS 1&2 (80:20) decreased by $4/gt delivered dockside, P&S 5ft by $7/gt delivered, and shredder feed by $5/gt delivered. Dock prices in Los Angeles decreased at list level by $10/gt but effective prices were tempered by ongoing demand for scrap flows.
- US containerized ferrous scrap indices were rangebound on both coasts on Thursday after declining for three weeks on the East Coast and two weeks on the West Coast.
- The sideways pricing expected in the US domestic scrap market in October limited further declines in containerized exports this week. Scrap sellers on both coasts highlighted limited inventories for export. On the East Coast, scrap dealers noted the challenge in replenishing volumes despite the softer Turkish bulk export scrap demand.
- The weekly Davis Indexes in New York moved within a limited range with #1 busheling and P&S 5ft holding at last week’s levels. The index for HMS1&2 (80:20) increased by $1/mt fas while shredded and machine turnings both declined by the same amount.
- Sellers expect a rebound in the export market in Oct and are therefore limiting discounts on deals. Buyers, especially from India, continued purchasing limited containerized quantities.
- The Los Angeles Davis Indexes for containerized scrap encountered a small drop across all grades with #1 busheling, HMS 1&2 (80:20), and P&S 5 ft declining by $1/mt fas. The index for shredded declined by $3/mt.
- Deals in Los Angeles began to soften in the week of Sep 18, continued declining as October began, but gained some ground at the beginning of this week. Transactions fell to $240-250/mt fas last week but began rebounding to $245-250/mt fas over the last few days.
- Several sellers reported additional inquiries from Asian buyers for November deliveries and extremely tight inventories for any immediate commitment. The net effect is expected to support containerized prices over the next two weeks.
- Dealers also reported an issue with the negotiation of #1 busheling. Asian buyers, especially from Taiwan, are not considering West Coast grade definitions in exact equivalency as those from the East coast. Interest in #1busheling declined this week but the effect on pricing and further definition of the grade by sellers on ongoing deals is yet unknown.
- More clarity and support for US-sourced containerized scrap is expected as China returns from holiday. Chinese activity in finished steel and ferrous imports could also aid Japanese-sourced scrap which in turn can support US-scrap demand and price levels.
- The Davis Indexes HMS 1&2 (80:20) and shredded in San Francisco increased by $1/mt fas. The indexes for #1 busheling and P&S 5ft remained unchanged.
- In Seattle, the container index for #1 busheling and shredded remained unchanged as HMS 1&2 (80:20) and P&S 5ft increased by $2/mt fas.
- A flat US exchange rate and a dearth of trucking options resulted in declines across most ferrous grades in October.
- In Toronto, #1 bundles and busheling declined by C$12/nt ($9.15/nt) and C$6/nt, respectively, with the latter falling by C$10/nt in Montreal.
- The monthly Davis Indexes in Toronto for HMS 1&2 (80:20) decreased by C$2/nt delivered consumer and shredded declined by C$4/nt. Turnings were flat, but the index for P&S 5ft surged by C$21/nt.
- In Montreal, the monthly Davis Index for machine shop turnings dropped by C$28/nt delivered, HMS 1&2 (80:20) increased by C$2/nt, and P&S 5ft index rose to by C$5/nt. Shredder feed declined by C$10/nt delivered consumer.
- Canada has confirmed a second wave of COVID-19 infections, resulting in modified shutdowns in the country’s two largest cities—Montreal is on “red alert,” and nearly all businesses will remain shut through October.
- Trucking services have also largely dried up as a result of the pandemic, and unless traders have access to rail or booked sales early, they won’t be able to move many tons, resulting in a paucity of export volumes and flat tags.
- With the US presidential election looming next month, as well as existing uncertainty pertaining to the pandemic, several market participants envision prices to remain flat through the end of the year. (C$1 = $0.76)
- Domestic ferrous scrap prices in Mexico increased for most grades in the North and Central area due to higher demand from the automotive and manufacturing industries.
- In North Mexico, the weekly Davis Indexes for HMS 1&2 (80:20), machine shop turnings, and shredded increased by MXN50/mt, MXN38/mt, and MXN172/mt delivered, respectively. P&S 5ft fell by MXN50/mt and #1 busheling declined by MXN12/mt delivered consumer.
- Prices in North Mexico may fall by MXN500/mt this month, a source with operations in the North said, adding that the specific price range and date of the anticipated decreases remain unknown.
- The weekly Davis Indexes in Bajío were mixed HMS 1&2 (80:20) and shredded falling by MXN188/mt and MXN65/mt delivered, respectively. The indexes for P&S 5ft and #1 busheling were unchanged while shredded rose by MXN110/mt delivered.
- In Central Mexico, the Davis Index for most grades increased by MXN50/mt delivered consumer. Shredded was the only grade to decline and fell by MXN165/mt. ($1=MXN21.15)
- Japan’s monthly scrap export tender Kanto Tetsugen concluded Friday, Oct 9, with an average winning bid down JPY964/mt ($9.1/mt) fas Tokyo bay from the prior month. The tender sold 20,500mt of ferrous scrap for deliveries scheduled at the latest by November.
- The average bids dropped after reaching a 16-month high in September, as expected following low demand in domestic and export markets. Based on these results, traders anticipate Japanese ferrous scrap export prices to remain stable in the coming days.
- In Friday’s tender, two winning bids were from Vietnamese trading companies. The first bid for 10,000mt #2 HMS fas Japan, followed by the second fas Japan for 10,500mt. The first winning bid was lower by JPY941/mt ($8.9/mt) from the highest bid received the prior month. Mitsui Metalone Kenzai (MMK) and Nippon Steel Trading (NST) are said to be winners of Friday’s tender.
- Kanto tender’s prices are likely to set precedent for Japan and Southeast Asian markets. East Asian market was slow due to long week holidays for Golden week in China, Thanksgiving holidays in South Korea, and Moon holidays in Taiwan.
- In the domestic market, Tokyo steel held prices flat after announcing two price hikes in September. Bids were revised JPY1,000/mt ($9/mt) for ferrous scrap delivered to Tahara plant and JPY500/mt delivered Kyushu plant on Sep 15.
- Japanese crude steel output is likely to drop to 82mn mt in 2020, down by around 17.2pc from the prior year. The output would be the lowest in the last 50 years or since 1969.
- As demand from the auto industry rebounded, a few steelmakers like JFE and Nippon Steel have reignited their blast furnaces at Fukuyama and Kimitsu, respectively. Though, industry participants are doubtful if it is too early to call it a recovery and say demand will remain unstable for the duration of the pandemic.
- In the second half of FY2020 (Oct 2020-Mar 2021), demand from the construction sector could recovery and in anticipation, Japanese mills are preparing to ramp-up production.
- Indication of China’s plans to restart imports of ferrous scrap kept Japanese exporters positive. Before China’s restriction on imports of ferrous scrap, Japan was one of the major suppliers to the country. In 2017, exports to China stood at 1.81mn mt, which then fell to 40,000mt in 2019. Should the export to China rise, mills in Japan could have to pay more for procuring domestic ferrous scrap.
- In the Kanto region, the index for #2 HMS fell by JPY250/mt, with deals heard at the index price. Trades for the grade were heard cfr Vietnam. In the export market, the index for #2 HMS rose by JPY525/mt fob.
- An HS export deal was heard cfr Vietnam this week, with the index for the grade in the domestic market down by JPY167/mt.
- Limited deals for #1 busheling (Shindachi) were heard on fas and the index for the grade settled down by JPY125/mt from the prior week. In the export market, the weekly index for #1 busheling (Shindachi) fell by JPY100/mt fob.
- A deal for 4,000mt Japanese shredded was heard this week cfr South Korea. The index for shredded settled flat on fas on Wednesday.
- The index for #1 HMS was flat on fas basis and down by JPY125/mt on fob Japan. Deals in the domestic market were heard at fas index price.
- Taiwanese and Korean mills could resume bookings as soon as their respective holidays end. Until recently, Taiwanese mills preferred domestic scrap, prices for which dropped by around $10/mt last week, and subsequently trended flat this week.
- Yards offer were unchanged for Japanese HMS 1&2 (50:50) at cfr Taiwan, from the prior week. Bids, however, were down by $10/mt. The index for the grade decreased by $7/mt from the week prior and by $19/mt from Sep 16 cfr Taiwan.
- The index for Japanese HMS 1&2 (50:50) dropped by $5/mt cfr Vietnam with no trades heard. Vietnamese mills booked limited volumes of scrap, but traders believe the scenario could change as steelmakers are likely to ramp-up production in the coming days. ($1=JPY105.9)
- The weekly Davis Index for containerized HMS 1&2 (80:20) settled down $7/mt cfr South Korea. Import prices for other grades also declined as mills reduced bids on the back of sluggish finished steel demand. ‘Chuseok’ or the Korean thanksgiving holidays till Oct 2 kept trades limited as mid-sized mills shut their EAFs and are yet to return to the market.
- Domestic scrap prices rose this week by KRW5000-15,000/mt del mill as they preferred domestic scrap over imported.
- Hyundai Steel refrained from bidding for Japanese scrap in anticipation of further reduction in prices, while Posco booked 4,000mt shredded scrap from Japan cfr South Korea. Dongkuk Steel booked 30,000mt A3 scrap cfr for November delivery on Wednesday.
- The weekly Davis Index for P&S 5ft, #1HMS, and shredded fell by $7/mt, $6/mt, and $10/mt cfr South Korea, respectively. There were very few sellers in the market for containerized with mills focusing more on low-priced bulk scrap. Steel mills were negotiating deals with Japanese and US yards this week.
- The Davis Index for domestic Heavy A delivered Incheon and Pohang, Tuesday, settled up by KRW5,000/mt ($4.30/mt) and KRW15,000/mt ($12.91/mt) delivered mills, respectively, with major steel mills like Hyundai, Dongkuk, and others buying limited scrap at index prices.
- South American supplier offers of HMS 1&2 (80:20) were flat from the prior week due to a shortage of ferrous scrap supplies from the region.
- Steel mills held back buying due to national holidays. With Japanese domestic scrap prices under pressure, market participants expect offers to fall further.
- The weekly Davis Index for domestic Light A fell by KRW5,000/mt ($4.30/mt) delivered Pohang mill. Limited trades for the grade were reported at the index price as mills focused on buying special grades for high alloy making purposes.
- The Davis Index for containerized US-origin HMS 1&2 (80:20) settled unchanged at cfr Taiwan from the day prior on Friday but fell by $10/mt from Sep 24.
- Scrap trades in Taiwan thinned amid the Moon festival and national holidays. The weekly Davis Indexes for domestic HMS 1&2 (80:20) in South and North Taiwan Thursday settled flat delivered mill, respectively, from the prior week.
- The weekly Davis Indexes for containerized P&S 5ft, shredded, #1 busheling and #1 HMS declined by $12/mt, $5/mt, $9/mt, and $6/mt cfr, respectively. No deals were heard for the above grades.
- Buying prices fell and importers expect a further drop this week before Taiwanese mills cautiously plan to buy.
- Rebar and ferrous scrap prices were flat in Taiwan amid slow trading due to holidays. Steelmaker Feng Hsin Steel anticipates a further drop in prices in the coming days. Feng Hsin’s base offers for rebar were flat ex-works from the prior week.
- Shagang Steel lowered domestic finished steel prices for October deliveries and lowered domestic scrap prices too. The weekly Davis Index for the grade settled down by CNY15/mt delivered mill from prior Tuesday. The dollar delivered mill price remained the same from the week prior due to currency fluctuation.
- Prices for billets in the domestic market were down by CNY30/mt from a week earlier, ex-Tangshan mill on Tuesday.
- Trades have come to a halt amid the Golden week festival in China. Market participants said that domestic scrap prices in China are expected to remain on a downtrend in the coming week with traders expecting iron ore prices to fall after the holidays.
- The weekly Davis Index for HMS 1&2 (80:20) was flat delivered South Vietnam, inclusive of taxes, with limited deals heard at index prices. The index went up by $1/mt due to the depreciation of the Vietnamese dollar this week. Vietnamese mills remained cautious of bookings imported scrap expecting prices to drop further in the coming days.
- Mills were under pressure as low-priced HRC offers from China pulled down domestic sentiments. With offers for US-origin ferrous scrap falling, Vietnamese buyers could wait for a further correction before buying scrap.
- In the bulk market, a deal for Japanese #2 HMS and HS was heard cfr Vietnam. Vietnamese billet exports halted amid the Golden festival holiday in China.
- In the containers market, the weekly index for HMS 1&2 (80:20) settled down by $10/mt cfr Vietnam on Thursday. Amid the holiday season, trades dropped in Vietnam in sync with other Asian markets.
- The weekly indexes for containerized #1 busheling, shredded and P&S 5ft fell by $14/mt, $9/mt, and $15/mt cfr, respectively, on Thursday. Deals were heard for P&S 5ft on a cfr basis.
- More Vietnamese mills are exploring the Russian market for lower-priced bulk offers after Korean mill Dongkuk steel booked 30,000 mt A3 scrap cfr for November delivery on Wednesday.
- A shortage of domestic scrap and hopes of recovery in finished steel demand could drive Vietnamese scrap bookings in October.
- Indonesian mills focused on domestic scrap purchases. Billet imports could rise over the next couple of months as steel mills shift focus from imported scrap to other alternatives.
- The Indonesian government’s new guidelines for scrap imports require registrations by scrap exporters and importers of scrap into Indonesia. Scrap imports into Indonesia have halted amid a lack of clarity about new rules and delays in registration caused by reduced staff at government offices due to the pandemic. None of the traders renewed their ferrous scrap import license which expired on Oct 1.
- On the exporters’ end, the registration process has started with UK exporters applying at the Embassy. Other countries like Hongkong, Australia, New Zealand, Malaysia have also started getting a notary certificate from the Embassy.
- Market participants are expecting domestic scrap prices to stay flat amid stable demand from the auto and infrastructural sectors and a shortage of imported scrap.
- The weekly Davis Index for HMS 1&2 (80:20) Thursday settled flat cfr Jakarta. The weekly Davis Index for P&S, #1 busheling and shredded was also flat amid no trades.
- Traders are offering blast furnaces-made billets cfr SE Asia amid low buying. Few suppliers expect a better market and revoked earlier offers. A Thailand-based mill bid for Iranian billets at cfr on Wednesday.
- The weekly Davis Index for domestic HMS 1&2 (80:20) rose by THB50/mt ($1.6/mt) delivered Rayong mill inclusive of taxes as traders were not willing to reduce prices further.
- Mills have stopped purchases from the last two weeks as they have ample inventory. Old contracts are being fulfilled, traders said.
- Sluggish finished steel demand this week added to the woes of traders sitting with high inventories of imported scrap.
- The weekly indexes for HMS 1&2 (80:20) rose by MYR90/mt ($20/mt) and MYR35/mt to delivered western mills and eastern mills including taxes, respectively. A shortage of local scrap has lifted offers and traders refuse to sell at lower prices. No trades were heard in the import market.
- Market participants are expecting demand for finished steel to remain subdued amid delays in new infrastructural and real estate projects. Traders expect domestic ferrous scrap prices to fall in line with global cues.
- The Malaysian government enforced new certificate approvals for metal scrap imports which aims to prevent other countries from sending waste into Malaysia disguised as scrap.
- Indian imported scrap trades were slow amid a wide gap between bids and offers. The secondary steel sector is still struggling with weak rebar demand from the real estate and construction sectors.
- The daily Davis Index for containerized shredded settled flat cfr Nhava Sheva from a week earlier in absence of trades. On Friday, offers were $5/mt higher than the index price.
- Indian imported HMS scrap prices were mixed while offers reported a jump of $5-7/mt from a week earlier. Though most Indian steel mills were targeting lower ferrous scrap prices, suppliers revoked low offers anticipating a recovery in demand and shortage of domestic scrap.
- The Davis Index for HMS 1&2 (80:20) of UAE-origin, Friday cfr Nhava Sheva rose $3/mt from a week prior. The gap between Dubai HMS and imported shredded has narrowed sharply with shredded prices failing to rise.
- Though finished flat steel prices for October deliveries rose by a maximum of Rs2,000/mt ($27/mt), boosting market sentiment. However, mills are less likely to buy scrap at higher prices amid weak end-user demand.
- A trader concluded a deal for 30,000mt Indian blast furnace billets at $455/mt cfr Philippines, higher than what was expected earlier. The deal kindled hopes of better prices in the export market.
- In the bulk market, no trade for US-origin HMS 1&2 (80:20) materialized as buyers refused to bid cfr Kandla against firm offers of $300-305/mt cfr Kandla. Non-recovery of rebar sales and billet exports has kept buyers silent in the domestic market.
- Turning scrap traded in limited volumes amid an uptick in HMS prices. The weekly index for Turning scrap rose up $1/mt from last week. ($1=Rs73.32)
- Indian domestic ferrous scrap prices remained under pressure Friday amid sluggish demand from steel mills. The Davis Index for HMS 1&2 (80:20) fell by Rs400/mt ($5.46/mt) from Thursday and by Rs500/mt del Mumbai mill from Oct 1.
- Mills in the North refrained from buying raw materials as demand from end-users is still low. The index for HMS 1&2 (80:20) settled unchanged from Thursday and down by Rs400/mt del Mandi Gobindgarh from Oct 1. The supply of ferrous scrap in the domestic market has started easing with a visible impact on prices this week.
- Pakistani ferrous scrap buyers continued to limit imported scrap trades to need basis. Many mills resisted higher offers. Non-recovery of rebar sales has dampened market sentiments.
- The Davis Index for containerized shredded settled cfr Port Qasim, down by $1.41/mt from Thursday, losing $5/mt from the prior week. Limited trades for containerized shredded of Europe and UK-origin were reported as the appetite for imported scrap is low, especially since the supply of rolling scrap from ship recycling has improved.
- Amid renewed buying interest in India, HMS scrap prices in Pakistan showed mixed trends. Dubai being the preferred supplier, offers registered an uptick in the early half of the week. Trades for UAE-origin mixed #1 HMS and P&S sarya scrap were reported at stable levels from the prior week. Offers of South African scrap jumped by $5-7/mt as the African government intends to lower exports to support the domestic industry by implementing a new pricing system.
- The weekly Davis Indexes for P&S and busheling settled cfr Port Qasim, down by $2/mt and up $1/mt, respectively.
- Domestic steel prices in Pakistan failed to lift for another week as demand continues to lag. Hopes of demand recovery driven by infra projects initiated by the government in north Pakistan could lift trades next week, though, a sharp recovery is ruled out.
- The weekly Davis Index for commercial Bala billet and G-60 billet, Friday, settled down PKR75/mt and PKR125/mt from the prior week.
- The weekly Davis Index for G-60 rebar settled ex-works Karachi, up PKR708/mt from last week. Mills canceled discounts on expectations of improving demand as the impact of monsoon has subsided.
- Mixed sentiments in the imported scrap market held back trades for domestic scrap in Pakistan. The weekly index for Pure Q Toke (shredded) rose by PKR50/mt ex-Pakistan yard in line with limited supply. ($1=PKR163.93)
- Bangladeshi mills are dealing with weak domestic steel sales for over a quarter resulting in inventory pileups. Imported scrap prices remained unviable for most secondary steelmakers who are operating at 50-60pc capacity.
- The Davis Index for containerized shredded, Friday, cfr Chattogram was flat from a week earlier. Limited trades for containerized shredded scrap from Europe, Australia, and New Zealand were reported as per mills requirements.
- The index for US-origin HMS 1&2 (80:20) in containers rose by $2/mt from last Friday. The market for US-origin bulk cargoes was quiet as mills refused to match high offers on weak domestic steel demand and high raw material inventories.
- A few trades of Latin American HMS #1 and P&S were reported this week.
- The Davis Index for busheling settled cfr Chattogram, down by $2/mt. The Kanto tender result on Friday indicated a possibility of a decline in Japanese busheling scrap prices in the coming days. Containerized P&S scrap traded slightly lower prices pulling the index down $2/mt. Major mills are seeking government aid to tide over losses incurred due to the pandemic as they believe demand is unlikely to recover before November.
- Trades for billets reported flat from last week. The weekly Davis Index for rebar from medium steelmakers was down by BDT250/mt from the prior week. Small scale steelmakers offered rebar lower by at least BDT3,000-5,000/mt compared to the prices quoted by large steel producers like BSRM and AKS. The weekly index for rebar by large scale producers thus was stable from the prior week.
- The index for domestic shipbreaking scrap equivalent to P&S rose by BDT250/mt from the prior week. Supply from ship breaking is expected to increase with the resumption of cutting operations at most Chattogram yards. The weekly index for HMS 1&2 (80:20) settled ex-Bangladesh yard unchanged from the prior week. ($1=BDT84.79)
- The weekly Davis Index for CIS basic pig iron declined by $4/mt on Friday amid weak business activity.
- Negotiations were slow as key buyers like the US and China remained absent as the former were fully focused on their domestic ferrous scrap trading and the latter were closed for business due to a national holiday.
- The weekly Davis Index for CIS pig iron in Italy dropped by $3/mt to $375/mt cfr on Friday as the global market softened.
- Negotiations in the Italian market were sporadic due to a gap in the bids and offers, with importers looking to buy at around $370/mt cfr and suppliers willing to sell at close to $380/mt cfr.
- The weekly Davis Index for basic pig iron (BPI) decreased by $2/mt cfr New Orleans port on Thursday after import markets became quiet and activity slackened over the past two weeks.
- The last confirmed BPI sale to the US concluded in late September when the CIS sold a few cargoes at $387-390/mt cfr Nola.
- A rumor of a BPI cargo being sold to the US at $375/mt cfr Nola was false and new offer levels are expected to be around $385/mt cfr Nola.
- Market participants heard that a 60,000mt cargo of BPI was sold at $385/mt cfr China late last week, down by about $8/mt from the sale at $393/mt cfr China from the CIS on Sep 17.
- The US market is currently more focused on the domestic scrap trade, which was in full swing on Thursday with prices trending flat to down by about $5-10/gt near the coasts. BPI prices could weaken as their sales in Asia have declined. A weakness in the US domestic scrap prices could also impact BPI rates.
- The Davis Index for nodular pig iron (NPI) imports remained unchanged as supply of the grade is tight and no recent offers or deals have been confirmed.
- The weekly Davis Index for US hot briquetted iron (HBI) imports is flat. New activity has not been reported for HBI due to low demand, however, the material is likely priced at this level on Thursday, compared to price trends for similar alternative grades.
- The index for Sponge iron settled unchanged from Thursday for deliveries to Mumbai and Mandi Gobindgarh mills on the back of low demand.
- From Oct 1 price increased by Rs1,100/mt for Sponge iron delivered to Mumbai mill and by Rs400/mt del Mandi Gobindgarh mill.
- With iron ore exports from India gaining momentum, input prices for sponge iron have increased. Producers thus looked to pass on a partial increase to consumers.
India finished steel
- The index for billet in Mumbai rose by Rs1,000/mt ($13.67/mt) from the previous Friday following a rise in rebar prices. The index for rebar in the week increased by Rs1,200/mt ($16.41/mt) on healthy demand.
- In Raipur, the index for billet was up by Rs850/mt ($11.62/mt) from the previous Friday on higher sponge iron prices. A major deal early in the week also set a bullish trend in the market. The index for rebar rose by Rs400/mt ($5.47/mt) ex-works.
- The index for ingot in Mandi Gobindgarh rose by Rs500/mt ($6.83/mt) from the previous Friday, due to a similar rise in local scrap prices.
- In Gujarat, the bi-weekly index for billet rose by Rs600/mt ($8.2/mt) ex-works on Thursday from a week ago amid renewed buying interest. The index for rebar was also up by Rs400/mt ($1.36/mt) on better sales.
- In Durgapur, the bi-weekly index for rebar rose by Rs801/mt ($10.96/mt) from the prior week, while the index for billet rose by Rs1,288/mt ($17.62/mt) from the prior week. Mills tried raising semi-finished and finished steel prices to pass on increased input costs to end-users. However, trades could suffer at those price levels.
- In Chennai, the bi-weekly Davis Index for rebar rose by Rs350/mt ($4.78/mt) ex-works from the prior week. The index for billet increased by Rs100/mt ($1.36/mt) compared to the prior week. Trades, however, were limited.
- Although shipbreaking scrap prices gained mid-week, they came under pressure Thursday onwards. As a result, HMS Attachments and Melting prices were unchanged from the prior week.
- The index for 8Ani rose by Rs400/mt ($5.47/mt) ex-Alang amid a few trades in the market.
- The demand for ship plates remained firm throughout the week, and the index for 5kg plates rose by Rs400/mt ex-Alang. The index for 1kg plates, however, settled flat on Friday.
- Shipbreakers lowered their offers towards the end of the week in a bid to clear excess inventories.