NEW YORK Containerized ferrous scrap export prices to most Asian markets retreated this week after a regional benchmark tender in Japan slipped a few dollars and demand from Taiwan weakened.
Market participants are divided on whether a slight decrease in prices of the monthly Kanto-region auction in Japan (amm.com, July 10) will send other regional prices down in the coming days.
Buyers and sellers in Taiwan said prices softened before the July 9 Kanto tender as mill demand plummeted following weeks of heavy buying to fill inventories.
"Now is the season for electricity rationing and mills also stop running some furnaces, which have to go though inspection. The inspection period can be anywhere from a week to one month, so the total demand drops," one Taiwanese trader said.
A buyer for one Taiwanese producer said that at least three mills have planned one-week maintenance shutdowns in August, while a fourth mill is expected to be down for two to three months following an explosion at its facility.
As a result of the weaker demand, market participants said containerized shipments of an 80/20 mix of No. 1 and No. 2 heavy melt ranged between $351 and $355 per tonne c.f.r. Taiwan, down from $355 to $360 the previous week.
Shredded scrap exports to Taiwan were reported at $5 per tonne above the HMS 1&2 (80:20) price range, while container exports of 5-foot plate and structural scrap to Taiwan were reportedly at $365 to $370 per tonne.
Containerized export prices to countries such as Indonesia, South Korea and Thailand were mostly unchanged from a week ago, according to market participants, although many felt prices could soften soon after mills lowered bid prices this week.
However, traders in Malaysia and Vietnam reported some strengthening following a recent West Coat bulk sale into Malaysia at $395 per tonne c.i.f. and offers of $390 per tonne for bulk HMS 1&2 (80:20) into Vietnam.
Other traders speculated that markets will at the very least hold at current levels.
"We anticipate the scrap market will not go down further as scrap flowing into domestic scrap dealers yards remains low and offer prices of deep-sea cargoes remain high at above $390 per tonne. There is still demand for Japanese scrap from Korea and Vietnam in the market," one exporter said.
A buyer for one large Korean producer said his mill tried to secure scrap at decreases of at least $5 per tonne this week but was unsuccessful.