NEW YORK Export prices for containerized ferrous scrap to Asia slid over the past seven days despite buyers returning to the markets after the regions Lunar New Year holiday.
Poor finished product sales and domestic scrap prices across the region impacted scrap tags and failed to bring back seasonal, post-holiday demand, market participants said.
Most sources noted declines in U.S. West Coast containerized ferrous scrap export prices over the past week, putting trades for an 80/20 mix of No. 1 and No. 2 heavy melt in a range of $335 to $338 per tonne c.f.r. Taiwan. These prices were reportedly down from $340 to $345 per tonne for HMS 1&2 (80:20) previously and off about $20 per tonne since mid-January (amm.com, Jan. 15).
One Taiwanese trader said the decrease was triggered by domestic price drops in Japan and the United States, adding that Japanese mills lowered their prices after receiving bulk scrap shipments that were booked in December, when the market there soared due to supply shortages.
"I guess that material arrived in Japan one after another. So the mills in Japan started to cut down domestic prices, which impacts the markets a lot," he said. "After the Chinese New Year (holiday), finished product sales out of China and South Korea have been slow. Taiwan reflects the market very quickly. ... Therefore, they have been testing the market."
Prices continue to slide as Asia returns to the market and could bottom out at $330 per tonne c.f.r. Taiwan for HMS 1&2 (80:20), one U.S. exporter said, but others speculated the market could drop further to around $325 per tonne.
"With the recent scrap price drops at Tokyo Steel (Manufacturing Co. Ltd.), scrap prices are continuing to erode despite the return of Asian buyers. Bulk will also be affected," the U.S. exporter said.
A mill buyer in Taiwan said his mill was already bidding $332 per tonne for HMS 1&2 (80:20) but had yet to trade at that level Feb. 13.
Steel mills across South and Far East Asia will continue their efforts to drive scrap prices lower, one Japanese trader said.
"Demand for scrap has not been rising in most regions. Most steel mills are expecting scrap markets to keep softening as iron ore and coking coal markets are still on the downward trend," he said.
Meanwhile, sources said inquiries from Vietnam and Indonesia are on the rise, with Thailand and China virtually out of the market with extremely low bids.
Sales of containerized HMS 1&2 (80:20) were reported into Vietnam in a range of $345 to $350 per tonne c.f.r. Ho Chi Minh City, down $5 per tonne from previous levels. Scrap delivered into the port of Haiphong, Vietnam, was reported at about $5 per tonne above that range.
Indonesian buyers reportedly booked containers of HMS 1&2 (80:20) at $345 to $350 per tonne c.f.r. Jakarta, identical to the previous range, with shredded scrap prices at around $380 per tonne.
One trader for a global containerized scrap exporter said these countries booked scrap purely because prices had dropped, while another trader said he felt some buyers were taking positions on scrap.
"We didnt see any demand return (after the Lunar New Year holiday) and found most suppliers did not sell at these low prices. Some buyers bought cargoes because they expect a rebound. It is more like gambling," he said.