Ferrous this week: A summary

Here’s a snapshot of some of our coverage this week. For more details on all grades and domestic prices you can visit our site: davisindex.com.

 

Turkey:

 

  • The daily Davis Index for Turkish imports of US-origin HMS 1&2 (80:20) increased by $1.75/mt to $259.40/mt cfr on Friday.
  • Turkey’s ferrous scrap market remained bullish. Some mills were looking for cargoes for July shipment, but suppliers raised offers further or decided to step back, expecting higher prices next week.
  • An Izmir-based mill was heard to have purchased a cargo from the USA on Thursday and while full details of the transaction were not disclosed, Davis Index learned that HMS 1&2 (80:20) changed hands at $259.50/mt cfr.
  • In the domestic market, Turkish mills raised purchase prices for shipbreaking scrap by $10/mt to $250/mt delivered during the week.
  • Daily domestic rebar spot prices climbed by TRY30-70/mt ($4-10/mt) across Turkey to settle at TRY3,340-3,400/mt ex-works, including 18pc VAT, on Friday amid active trading.
  • The weekly Davis Index increased by TRY53/mt ($8/mt) to TRY1,875/mt delivered for Turkish DKP scrap (equivalent to bonus grade) on Friday.
  • Turkish mills raised purchase prices for local ferrous scrap amid better demand for it and higher prices for imported material. ($1 = TRY6.77)

 

Europe:

 

  • The weekly Davis Index for HMS 1&2 (75:25) in the ARAG region inched up by €2/mt ($2/mt) to €197/mt delivered dockside on Tuesday.
  • Dockside ferrous scrap prices in the Netherlands and Belgium moved higher after some suppliers raised collection prices to €200/mt delivered this week.
  • These exporters expect the current export market uptrend to continue amid the ongoing strong demand from Turkey.
  • However, other sellers preferred to err on the side of caution and kept collection prices unchanged at €195/mt delivered. (€1 = $1.12)

 

CIS:

 

  • The weekly Davis Index for HMS 1&2 (80:20) or A3 scrap in Russia’s Baltic Sea region climbed by $1/mt, while the index in the Black Sea region rose by $6/mt. Both indexes settled at $239/mt fob on Friday.
  • Negotiations are active in Russia’s export ferrous scrap market, but deals were sporadic this week. It was heard that a supplier from St Petersburg sold HMS 1&2 (80:20) at $254.50/mt and bonus material at $264.50/mt cfr to Turkey around mid-week.
  • Other exporters are targeting higher prices, referring to the most recent sales from the USA, Europe, and Canada to Turkey.
  • The weekly Davis Index for HMS 1&2 (80:20) or A3 scrap inched up by Rub75/mt ($1/mt) in St Petersburg dock to Rub14,975/mt delivered on Friday. ($1 = RUB68.67)

 

UK:

 

  • The weekly Davis Indexes for HMS 1&2 in the north and south UK climbed by £7/mt ($9/mt) and £10/mt over the past week to £145/mt, respectively, delivered dockside on Tuesday.
  • While ferrous scrap prices on major seaborne trade routes have plateaued of late, UK bulk exporters rumoured to be holding short positions were forced to raise buying prices to secure sufficient volumes.
  • This latest price hike will narrow margins and likely reduce the number of options in exporting material to continental Europe, where some ferrous scrap traders had been conducting regular business.
  • Focus among local merchants has now shifted towards monthly settlements with UK steel producers, with some market participants indicating that mills have open negotiations with bids of £15/mt up on last month’s levels. (£1 = $1.26)

 

Spain:

 

  • Davis Index’ northern Spain HMS 1&2 (80:20) and shredded ferrous scrap small bulk indices edged €1/mt ($1/mt) lower over the past week to €221/mt and €231/mt cfr, respectively, on Friday.
  • Market participants conveyed mixed messages this week, with Spanish buyers citing appreciation of the euro for nudging ferrous scrap import prices slightly lower.
  • The EU single currency has surged 3.67pc to $1.13 per euro from $1.09 on May 26, driven largely by positive sentiment around the ECB’s €1.35tn Pandemic Emergency Purchase Programme (PEPP).
  • Meanwhile, some UK suppliers believe that currency fluctuations are unlikely to have much of a material impact given that some Spanish mills need volumes.
  • This likely reconciles with anecdotal evidence from market participants claiming that Celsa Barcelona has been paying above market prices to secure tons.
  • As a result, inbound US-origin deep-sea ferrous scrap cargoes to the mill were diverted to the company’s other Spanish steel-making facility, Celsa Nervacero in Bilbao. (€1 = $ 1.13)

 

USdocks:

  • US East and West Coast dock collection prices for ferrous scrap increasedthis week, supported by stronger export demand and tight supply.
  • US East Coast dock collection prices for ferrous scrap increasedby $11-18/gt for all grades as export activity including fresh US-origin scrap bookings to Turkey increased.
  • The Davis Index learned that East Coast docks increased collection price levels late last week by $15/gtfrom $195-205/gt to $210-220/gt for HMS 1&2 (80:20). Some sellers were even offered $225/gt for remote material delivered East Coast dock.
  • The weekly Davis Indexes in Houston remained unchanged for HMS 1&2 (80:20) at $211/gt delivered after a series of increases over the past several weeks.
  • Higher Japanese export pricing and lower availability has provided support to US ferrous scrap exports off the west coast.
  • The weekly Davis Index in Los Angeles for HMS 1&2 (80:20) increased by $10/gt to $145/gt after flat pricing for the past two months. Los Angeles remains substantially lower than San Francisco which increased to $186/gt delivered dockside and Portland at $169/gt delivered.
  • Portland moved to $187/gt delivered for the gradelater in week as domestic mills in the region increased scrap prices by $10-15/gt on Tuesday.
  • Buyers in the West Coast increased volume purchases of HMS 1&2 (80:20) and decreased pricing pressure on better grades such as shredded and P&S 5ft.
  • ·        US bulk offers to India are now at $285 to $290/mt for shredded, up from $281/mt cfr ten days ago.

 

US containers:

  • US containerized ferrous scrap prices rose on both coasts as buyers sought inventories. Sellers on both coasts reported higher inquiries as well as deal prices over the past week.
  • The weekly Davis Index in New York for #1 busheling increased by $8/mt to $255/mt fas while the index for HMS 1&2 (80:20) rose by $7/mt to $228/mt fas.
  • The East Coast gaining momentum as sellers encountered more container market activity in the past week than the past 8-9 weeks.
  • Early in the week, HMS 1&2 (80:20) prices increased by $10-15/mt from $200-210/mt fas to $215-220/mt fas from Los Angeles.
  • In Los Angeles, the weekly Davis Indexes increased $12 to $219/mt for HMS 1&2 (80:20) while San Francisco’s index for the same grade increased by $16/mt, to $213/mt fas.
  • Higher Japanese ferrous scrap export scrap prices and limited availability had Asian buyers increase US sourcing which supported higher containerized scrap prices in the US.

 

 

Mexico:

 

  • Mexico’s domestic ferrous scrap prices fell for most grades in Bajio Mexico and North but increased in the central region due to concerns over low supply.
  • Bajio prices dropped by around MXN200/mt ($9.2/mt) over the past week.
  • Supply tightness expected to continue over the next few weeks as the country’s automotive and manufacturing industries restart for business.
  • In the north of the country, the automotive, mining and construction industries are restarting activities faster than in the south of the country, after operations were suspended for about two months due to COVID-19.
  • The weekly Davis Index in Bajío fell by MXN150/mt to MXN5,750/mt delivered Mexico consumer for HMS 1&2 (80:20) while the same grade increased by MXN100/mt to MXN5,138/mt delivered to Central Mexico.

 

 

US domestic:

  • The monthly domestic ferrous scrap trade finalized in the US on Friday settling sideways to up $10/gt for prime grades, predominantly sideways with a few mills increasing $10/gt on trades for cut grades, and sideways to down $10/gt for shredded, compared to May final prices.
  • The Midwest markets followed the price trend that began in Detroit with offers up $10/gt on prime grades such as busheling, sideways on cuts such as P&S and down $10/gt on shredded scrap. Settlements moved quickly as some mills had no buying program for June.
  • In Chicago, the monthly Davis Index for #1 busheling increased by $10/gt from $307/gt to $317/gt delivered. Shredded decreased by $8/gt from $257/gt to $249/gt delivered.
  • Like May, scrap price movement in June also depended on region and mill.The Cincinnati-Indianapolis market saw elevated volume activity and most material transacted at flat pricing compared to May levels, including primes. However, the Davis Index for shredded dropped by $14/gt from $259/gt to $245/gt delivered.
  • Market participants reported flows were a bit stronger than demand, which had some mills turning away tons of shredded by mid-week as mill buying programs remain at reduced levels.
  • Reduced activity for automakers, is continuing to impact prime scrap generation as well as low automotive related orders for Midwest mills.
  • Very few domestic deals were concluded in Philadelphia based on elevated export activity at comparable prices between mills and dock.
  • Southeastern US traded predominantly sideways with some deals obtaining the $10/gt increase on #1busheling. The increase in prime grades was not uniform as a large mill buyer remained steadfast and purchased all grades at sideways pricing.
  • In the Carolinas, the Davis Indexes for #1busheling increased by $6/gt from $305/gt to $311/gt delivered. Purchases on prime grades were reported between $300-320/gt delivered. The HMS 1&2 (80:20) and shredded indexes remained unchanged at $233/gt delivered and $245/gt delivered, respectively.
  • In Houston, scrap traded sideways across all grades. Mill offers of decreases on shredded scrap by $10/gt were resisted early in the trading week since feedstock buying prices at yards increased by $5-15/gt ($5-15/nt) over the past few weeks. The shredded index decreased by $2/gt to $268/gt delivered.

 

Japan:

 

  • Japanese ferrous scrap export prices rose another by JPY1,000-1,500/mt for the third successive week as bookings by steelmakers increased. Rising iron ore prices encouraged mills using blast furnaces to opt for ferrous scrap.
  • Japanese #2 HMS export prices moved up by JPY1,500-2,000/mt to JPY24,500-25,500/mt fob Japan week-on-week.
  • The weekly Davis Index for busheling settled at JPY27,250/mt ($251/mt) fob Japan, on Wednesday, up by JPY1,250/mt from the prior week.
  • Japan’s domestic ferrous scrap prices rose sharply as domestic demand increased but supply remained tight.
  • Tokyo Steel announced three price hikes by JPY500-1000/mt each effective from June 02, June 04 and June 06.
  • Nippon Steel announced scaling up of production by relining its blast furnace at its Nagoya works.

 

Taiwan:

 

  • Imported ferrous scrap prices in Taiwan rose following global cues this week. Trades for containerised US-origin HMS 1&2 (80:20) concluded at $235-240/mt cfr Taiwan with the index settling at $238/mt cfr Taiwan.
  • Offers for Australia and South America origin containerised HMS 1&2 (80:20) were at $245/mt cfr Taiwan. Trades for P&S 5ft were at $250-255/mt cfr Taichung with the index settling at $253/mt cfr on Thursday, up by $12/mt from the prior week.
  • In small bulk markets, Japanese HMS 1&2 (50:50) was traded at $255-260/mt cfr Taiwan early week. The same was offered at $265/mt cfr Taiwan on Friday. Higher grades like HS and busheling traded at $275-280/mt cfr Taiwan, up by $5-10/mt from the prior week
  • Japanese bulk shredded traded at $272-275/mt cfr Taiwan.
  • In South Taiwan, Feng Hsin Steel held domestic ferrous scrap purchase prices for HMS 1&2 (80:20) at NT$6,800/mt ex-mill and rebar prices unchanged at NT$13,800-14,000/mt del Taichung plant.

 

Vietnam:

 

  • Vietnamese mills booked limited ferrous scrap as a sharp rise in Japanese prices squeezed their margins.
  • In small bulk markets, Japanese #2 HMS traded at $260-265/mt cfr South Vietnam.
  • Few bookings of containerized HMS 1&2 (80:20) were heard at $242-245/mt cfr Vietnam with its index settling at $245/mt cfr Vietnam, up by $8/mt from the prior week.
  • Offers from US suppliers moved up due to increased bookings by Turkish mills.
  • The Davis Index for HMS 1&2 (80:20) settled at VND6,000,000/mt ($257/mt) delivered South Vietnam inclusive of taxes, unchanged from the prior week.
  • Trades for domestic scrap picked up as imported scrap prices moved up. Vietnamese buyers also slowed down trades for Japanese ferrous scrap, prices for which have increased. ($1 = VND23,313.5)

 

Indonesia:

 

  • Indonesian mills booked a limited volume of ferrous scrap due to low demand for finished steel.
  • Few offers for HMS 1&2 (80:20) were at $240-242/mt cfr Indonesia with its index settling at $238/mt, up by $4/mt from the prior week.
  • US-origin shredded in TEUs was offered at $260/mt cfr Jakarta. A deal was heard for shredded from Israel at $245/mt cfr Jakarta.
  • Domestic scrap equivalent to P&S was offered at IDR5,050/kg including local taxes. ($1= IDR14,175.5)

 

South Korea:

 

  • US-origin suppliers offered HMS 1&2 (80:20) at $240-245/mt cfr South Korea with the index settling at $240/mt cfr South Korea, up $12/mt compared to a week ago.
  • The index for containerised shredded settled at $248/mt cfr South Korea, up by $9/mt on Wednesday. No major trades were heard on the grade due to increase in offer prices.
  • Hyundai steel announced production cuts at its Dangjin plant which has an annual capacity of 1mn mt.
  • Domestic ferrous scrap prices in South Korea rose by KRW15,000-20,000/mt from the prior week. Major mills however announced purchased cuts to match current demand. ($1 = KRW1,216.81)

 

China:

 

  • Shagang Steel decreased bids for domestic HMS 1&2 (6-10mm thickness) by CNY30/mt in the early week on increased inventory, however, increased by bids again by CNY80/mt late in week in line with rising finished steel prices. Prices increased for HMS 1&2 (6-10mm thickness) to CNY2,610/mt del Jiangsu plant inclusive of the 13pc VAT.
  • In the domestic market, prices for billet rose by CNY80-100/mt over the week to CNY3,330/mt ex-Tangshan mill on Friday. Billet prices increased following rising iron ore import prices and higher steel futures.
  • Billet prices increased following rising iron ore import prices and higher steel futures. ($1 = CNY7.08)

 

Thailand:

 

  • Mills were offered containerised HMS 1&2 (80:20) at $235-240/mt cfr Thailand.
  • Busheling was offered at $285/mt cfr Laem Chabang with no buyers at those levels.
  • The weekly Davis Index for domestic HMS 1&2 (80:20) settled at THB7,800/mt ($245/mt) delivered Rayong inclusive of taxes, unchanged from the prior week, on June 2. ($1 = THB31.89)

 

Malaysia:

 

  • The weekly Davis Index for domestic HMS 1&2 (80:20) settled at MYR930/mt ($217/mt) delivered western mills, up by MYR10/mt and the index for HMS 1&2 (80:20) delivered eastern mills settled at MYR970/mt inclusive of taxes, up by $10/mt from the prior week. ($1 = MYR4.36)

 

India:

 

  • Trades are expected to register an uptick in the next month when end-user demand is expected to revive. Domestic scrap generation has taken a hit causing a scarcity in India.
  • That said, trades could still be subdued as construction activity during the monsoon remains slow.
  • In the northern region, production has resumed, and piled inventories have started dipping. Thus, mills increased enquiries for HMS scrap.
  • Early this week, a bulk cargo trade for US West Coast-origin 30,000mt mix scrap of a third HMS 1&2 and remainder shredded was booked at an average price of $280/mt cfr Kandla.
  • The daily Davis Index for containerised shredded settled unchanged at $285/mt cfr Nhava Sheva, up by $5/mt from the prior week.
  • Shredded in containers was offered at $285-290/mt cfr Nhava Sheva but there were no buyers in the market as bids were at $275-280/mt cfr Nhava Sheva. Buyers in southern India have enough inventories of shredded scrap at the moment.
  • Ahead of the Monsoon season, buyers were hesitant to place orders.
  • In Mumbai the daily index for HMS 1&2 (80:20) increased by Rs150/mt to Rs21,200/mt delivered millswhile Raipur index for HMS 1&2 (80:20) increased by Rs700/mt to Rs 23,450/mt delivered.
  • The index for billet rose by Rs200/mt and settled at Rs29,200/mt ex-works Raipur.
  • In Raipur, The Davis Index for rebar on Friday rose by Rs250/mt (3.3/mt) to settle at Rs35,350/mt (467.59/mt) ex-works while flat in Mumbai at Rs34,300/mt ex-works with limited trades.
  • Around nine deals for shipbreaking were concluded in the week. Prices for vessels in India are currently in the range of $300-310/ldt.
  • Indian shipbreaking 8Ani prices rose on as rolling mills in Mandi Gobindgarh ramped up their ingot production. The daily Davis Index for 8Ani rose by Rs225/mt ($2.97/mt) to Rs25,700/mt ex- Alang. ($1=Rs75.62)

 

Pakistan:

 

  • Demand for imported ferrous scrap in Pakistan improved this week as mill operations gained pace. Buying activity is expected to rise, as indicated by the conclusion of a bulk cargo booking.
  • Landed cost of bulk cargoes lowered as freight charges decreased on a fall in fuel cost and increased availability of vessels.
  • Imported ferrous scrap demand is expected to increase in the near term amid limited domestic scrap availability and rising steel demand.
  • One of the leading steel mills in Lahore booked bulk cargo of 32,000mt comprising shredded at $282.5/mt cfr Qasim.
  • The Davis Index for US-origin containerized shredded settled at $290/mt cfr Port Qasim on Friday, up by $3/mt from the prior day and by $6/mt from the prior week.
  • Most South African suppliers are struggling with export permits issues. Still, a few trades for South African HMS 1&2 (80:20) were reported at $265-270/mt cfr Qasim, up by $5/mt from the prior week.
  • The Davis Index for G-60 billet settled at PKR 93,000/mt cfrQasim, down by PKR500/mt from the prior week.
  • Reports of Chinese private investors floating plans for steel plant of 2mn mt annual capacity were also heard. ($1=PKR163.29)

 

Bangladesh:

 

  • Bangladesh steel mills booked very limited scrap as they await domestic market dynamics to offer a clear picture.
  • Major mills are still operating at 40-50pc capacities to match the sluggish demand. The upcoming rainy season, known to slow construction activity could impact finished steel demand.
  • Though other South Asian markets like Pakistan and Bangladesh were in the bulk market, Bangladesh mills showed little or no interest in bulk bookings.
  • This mainly since ferrous scrap bulk offers are over $300/mt cfrChattogram. The Davis Index for containerised P&S settled at $300/mt cfrChattogram, up by $20/mt from the prior week.
  • In the container market, the Davis Index for shredded settled at $298/mt cfr Chattogram on Friday, up by $6/mt from Thursday and by $11/mt from the prior week.
  • Until April, mills in the country were active for bulk imports. But with a persisting weak demand for steel, millsreduced appetite for booking large volumes.
  • Domestic billet prices this week have dropped by around BDT1,000-1,500/mt ($12-18/mt) from BDT42,000-42,500/mt ex plant levels.
  • Ferrous scrap prices in the global markets are likely to be under pressure in the coming days with the inflow of scrap in most yards in supplier countries improving.  ($1=BDT84.94)

 

Metallics

 

CIS:

 

  • The weekly Davis Index for CIS basic pig iron increased by $7/mt to $302/mt fob Black Sea on Friday as new deals were reported.
  • CIS suppliers could achieve higher prices as demand for pig iron improved significantly in China.
  • This week, one Russian exporter sold 50,000mt of the material at $334/mt cfr China, while another one traded 50,000mt at $335/mt cfr.
  • Both cargoes are due to be shipped to the Asian country in August. Late last week a cargo of Russian pig iron was booked in China at $323/mt cfr.
  • A supplier from Ukraine reached an agreement with an American customer at $312/mt cfr for 55,000mt of pig iron at the end of May. This cargo is scheduled for July shipment.
  • The Italian pig iron market was quiet. CIS suppliers decided not to announce any offers to this market amid little to no demand.

 

US:

 

  • The weekly Davis Index for basic pig iron (BPI) decreased by $10/mt from $327/mt cfr New Orleans to $317/mt cfr Nola on Thursday as fresh sales were concluded below last week’s offer levels. Markets are quiet for both domestic ferrous scrap and for pig iron imports.
  • Pig iron prices and demand are projected to increasein June.
  • Recent BPI sales to the US finalized at around $315/mt cfr Nola for CIS-origin material, $5/mt above the sale prices on May 7 at $310/mt cfr Nola. Offer levels this week were at $320-330/mt cfr Nola from Brazil and CIS, similar to the producers’ sale prices into China, where scrap prices are stronger than the US.
  • The index for nodular pig iron (NPI) imports remained unchanged at $375/mt cfr Nola as offers this week are low, and new sales have not been confirmed.
  • The weekly Davis Index for US hot briquetted iron (HBI) imports was flat at $233/mt cfr Nola. HBI import activity has been still for several months with the index price balanced with producers’ shipping point bids and equalized with delivered price variance for similar imports.

 

India:

  • In Mandi Gobindgarh and Mumbai, the daily index for sponge iron remained unchanged at Rs20,200/mt and Rs16,900/mt delivered mills, respectively.
  • In Raipur, the index for sponge iron increased by Rs775/mt to Rs16,274/mt delivered.

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