SINGAPORE Some mills in Southeast Asia appear to be short of ferrous scrap after the Lunar New Year holiday.
Traders have received more inquiries in the past week for prompt cargoes at a time when offers were scarce, pushing up prices.
Bulk cargo offer pricesbasis 50-percent No. 1 and No. 2 heavy melt (80:20) and 50-percent shreddedfrom the United States and Europe to Vietnam have risen by $10 per tonne in just a few days to $435 to $440 per tonne c.f.r. Feb. 22, a Vietnamese trader told AMM sister publication Steel First.
There were inquiries from a couple of mills looking for March cargoes, he said, but because there were few offers of material in containers, some buyers became nervous because "it seemed too late to get a reasonable price."
A Singapore-based importer agreed that offers were limited at the moment, and earlier speculation that scrap prices would soften after the weeklong New Year holiday was not realized. "There seemed to be some panic as the expected softening of scrap prices after the Chinese New Year did not happen," he said. "Steel mills now have to accept that the price is unlikely to go south, and some have no choice but to offer slightly higher prices to secure scrap to meet their requirements."
Chinese steel mills remained on the sidelines after scrap offers moved higher than their expectations.
"We are looking to book scrap at around $415 per tonne c.f.r. from the overseas markets, but offers are much higher than that," a Shagang Group source said. "Adequate stocks at the mill and ample supply from the domestic market allow Shagang to wait for a while."
"Other Asian steel mills may be more desperate to restock scrap by importing, but China is better off with its cheaper domestic supply," the source said.
Domestic heavy scrap prices in eastern China remained at 2,850 to 2,960 yuan ($453 to $471) per tonne Feb. 22, unchanged from prices before the holiday.
A version of this article was first published by AMM sister publication Steel First.