NEW YORK An attempt by some Taiwanese and South Korean mills to push down scrap prices has split market sentiment on the West Coast despite no volumes trading at the lower prices.
For their part, exporters reportedly have raised offer prices to counter the mills lower bids, with most sources acknowledging it was unclear how the development will play out in the coming days.
According to several market participants, some Taiwanese mills lowered the bid price for containerized shipments of an 80/20 mix of No. 1 and No. 2 heavy melt to around $360 per tonne c.f.r. Taiwan after booking reasonable volumes in a range of $365 to $368 per tonne.
Large-volume exporters, meanwhile, raised their offer prices to above $370 per tonne, with one exporters offer for HMS 1&2 (80:20) reported at $373 per tonne.
However, there were no confirmations of any sales at prices above $370 per tonne or below $365 per tonne.
A buyer for a larger Taiwanese producer said he is focused on buying cheaper domestic scrap and will wait to see where imports prices settle in the coming days before participating in international markets.
Some sources reported that Korean mills have lowered domestic buying prices by $5 per tonne, which could support an apparent move by some Taiwanese producers to push prices down to $360 per tonne.
Others, however, ruled out any decreases, citing recent bulk cargo sales to Korea at $409 to $410 c.i.f. Korea for No. 1 heavy melt.
A buyer for one Taiwanese producer questioned the reports of the bulk sales to Korea. "Most mills are baffled at the $409 bulk purchases (by one Korean consumer). Iron ore weakened. Foreign exchange rates weakened, with the Japanese yen over 100 (to the dollar)," he said.
One exporter of containerized scrap claimed that the reported prices were possibly false. The news of 165,000 tonnes of scrap selling from the U.S. West Coast to Korea at $409 per tonne for No. 1 heavy melt "is a disguise to screw the Japanese traders," he said.
Strong finished product demand in Japan has forced Japanese mill buyers to search foreign shores for scrap, which is atypical to the net scrap exporter.
One market participant said that Japanese mills have bought about 10,000 tonnes of scrap ex-Hong Kong in the past two weeks, with another suggesting that Japanese mills are being forced to follow import prices set by Korea.
"Unfortunately, because of the bulk contract news, container suppliers are trying to increase their offer prices. The market is messy," a buyer for a Korean producer said.
Some sources in Taiwan, meanwhile, said there were no local reports of imports of HMS 1&2 (80:20) at $370 per tonne.
"Its the usual U.S. West Coast suppliers hype. They always do that. Our buyers are balking at that number," one trader said.
Meanwhile, scrap markets in Indonesia, Malaysia and Vietnam are far from bullish, a seller to those regions said.
Apart from an unconfirmed report of a bulk sale from Australia to Vietnam at $390 per tonne for heavy melt, delivered prices for containerized scrap into those countries have hovered at $355 to $360 per tonne for HMS 1&2 (70:30), $365 to $370 for shredded scrap and $370 to $375 for bonus grade scrap, he said.
"The reason why the market in such regions is behind the international scrap market is that steel mills have not succeeded in transferring the increases in scrap cost to the price of their finished products due to tough competition with Chinese products," he said.