UK mills have bought ferrous scrap for February delivery at £20-30 per tonne below January levels, as export prices fell away following a quiet import week in Turkey, India, and the EU, market participants said.
“Export activity has eased off; this has allowed UK steelworks to take advantage,” one scrap processor said.
One mill bought the majority of the booked scrap this week at £25-30 per tonne below January levels. The steelmaker has not yet completed its bookings for February, choosing to wait for further reductions in line with international prices next week, according to participants.
A second mill had finished its bookings, buying more scrap than January at levels £20-25 per tonne below last month.
The downward trend in scrap prices arrives at a point when mills have increased their finished product prices, citing strong scrap prices over the last four months.
Further weakening could be experienced next week before February business concludes, as offer prices into Turkey slumped $20 on Friday, and are expected to fall further in the coming week.
Follow my news "Good for You". Follow my news "Good for You". Follow my news "Good for You".
Wednesday, February 9, 2011
DAILY SCRAP REPORT
***DAILY SCRAP REPORT: Market unchanged, merchants dismiss rumour of short-sea booking
08 February 2011
MB’s Daily Ferrous Scrap Index was unchanged on Tuesday when no new deep-sea cargoes were sold and market participants dismissed rumors of a short-sea booking by a Turkish mill.
The index calculated to $471.32 per tonne cfr Iskenderun, the same level as Monday. But Turkish steelmakers talked the market down, claiming offers had fallen.
“Today EU HMS 1&2 (70:30 mix) is being offered at $450 [per tonne cfr Turkey], while A3 from the Black Sea is as low as $425,” a source at one steelmaker said. “This has already been concluded.”
But merchants dismissed this report.
“This is propaganda,” said one. “Nobody can sell at $425 with a buying price of $405-410 [per tonne cfr].”
The index calculated to $471.32 per tonne cfr Iskenderun, the same level as Monday. But Turkish steelmakers talked the market down, claiming offers had fallen.
“Today EU HMS 1&2 (70:30 mix) is being offered at $450 [per tonne cfr Turkey], while A3 from the Black Sea is as low as $425,” a source at one steelmaker said. “This has already been concluded.”
But merchants dismissed this report.
“This is propaganda,” said one. “Nobody can sell at $425 with a buying price of $405-410 [per tonne cfr].”
Ferrous scrap prices fall less than anticipated
Ferrous scrap prices have sagged between $20 and $30 per long ton this month, less than some had expected following a fierce snowstorm that buried much of the Midwest.
Shredded scrap in key markets like Cleveland, Pittsburgh and Birmingham was down an average of about $25 per ton. Industry sources said the absence of enough feedstock for shredders, and the likelihood that the blizzard would cut supplies even further, prompted some buyers to rethink their plans.
Shredded seemed to become the benchmark for price declines for other grades of cut ferrous scrap, like No. 1 heavy metal and plate and structural scrap, in many of the largest steelmaking cities. The lone exception was Detroit, where Severstal North America Inc. and U.S. Steel Corp.'s Ecorse Works cut their scrap intake sharply this month. Prices decreases in Detroit matched the $25-per-ton cuts seen elsewhere, except for offers for No. 1 dealer bundles, which sagged $30 because of the integrated steelmakers' absence from the market.
The market was slow to develop in Chicago, which was among the worst hit by last week's blizzard. Most scrapyards and brokers, as well as mills, were shut Tuesday and Wednesday, putting pressure on buyers and sellers to get deals done by week's end at the latest. Prices for both the obsolete and prime grades were off only $15 per ton on average, although some mills were claiming they had pushed prices down as much as $25 or $30 per ton. Dealers in the region, on the other hand, said they were accepting $5- to $10-per-ton price cuts and were looking to hold scrap for March.
Two major suppliers said they had accepted price cuts of $10 to $15 per ton on heavy melt and shredded, but a little more than that for prime grades like No. 1 bundles and No. 1 busheling.
"Looking at our inventory, I figure we may have as little as 9,000 tons by month's end," said a trader at one major scrapyard in the region. "If that's the case, I will be a buyer next month and not a seller."
A Chicago-based broker said that while February was already a short month, the heavy snowfall would make it even shorter because many dealers will have to wait longer to get rail cars, delaying deliveries to the mills.
One indication that some mills are concerned about supply was word that many buyers normally quick to cancel existing orders at month's end, when they see prices declining for the following month, were holding back on that action, he said. "I think this is the month where they may have realized it's not time to get cute."
With the market slow to solidify, the direction for March remains unknown, a Midwest scrap seller said. "Up until the last minute, some dealers thought it was sideways. I started to get nervous mid-month, and I think there were others in the same boat. They just didn't think that everybody else could be wrong. This should make March much more interesting."
If prices were to slip again in March, there's a good chance that scrapyards will move to the sidelines and build inventory. "Prices have pretty much settled down $25 a gross ton across the board. Dealers are disgusted. Some are already calling for an up market in March, and I believe they will try to flex their muscles if it happens," the Midwest seller said.
He pointed out that steel producers had been raising prices for their finished products based on anticipated scrap increases in February. "People are watching what happens. Every customer and purchasing agent will be hammering on this point now that scrap has gone down," he said.
One Midwest mill buyer is out of the market completely at the moment as he expects further weakening in March prices.
Activity has been quiet in Canada. "Obsolete scrap flow is very tight, seemingly because of the weather. Mills have lots of scrap on the ground because they ordered more than necessary in advance of December and January to protect against tons not flowing due to weather. Coincidentally, yards had plenty of inventory so flow wasn't an issue," said a dealer who sells to Canadian mills.
"Mills are running very strong and they'll need a continued flow. They bought less this month to eat into their inventory but will resume normal ordering for March," he said. "If prices do anything other than strengthen, scrap will tighten up too much, and that's not something mills can risk."
On the East Coast, a handful of veteran players were unanimous in saying they don't know where the market is headed.
"The people that I talk to throughout the industry are split on the March market. I can tell you this, price drops and bad weather will slow up inbound. Right now, my crystal ball in foggy," one source said.
"March is really hard to call at this time. The Turks have moved away from the offshore market and really they do not know what to do. One thing for sure is they need to buy, and need to buy soon," he said. "The crisis in Egypt has them very concerned and they are all looking at each other to see who will pull the trigger first. On the domestic side, we have a real paradox. The weather has been bad in many parts of the country and historically this causes prices to rise."
Iron Ore-Prices steady, traders eye China's return
Iron Ore-Prices steady, traders eye China's return
* Forward swaps jump, Indian futures flat
* ArcelorMittal sees rebound in steel demand, prices
(Adds ArcelorMittal outlook, Indian futures)
By Manolo Serapio Jr
SINGAPORE, Feb 8 (Reuters) - Spot iron ore prices remained steady on Tuesday with physical market activity only expected to pick up later in the week when top consumer China returns from a week-long Lunar New Year break.
Key price indexes, which global miners use in deciding quarterly contract rates, have risen to record peaks before China went on holiday and analysts and traders say tight supplies of the steelmaking ingredient will keep prices high when Chinese markets reopen on Wednesday.
"It's seasonal restocking time and prices rose before the Chinese New Year as people tried to secure supplies before the holiday kicked in and there's usually a bit of a kick after the New Year as well," said James Wilson, analyst at Royal Bank of Scotland in Perth.
"People are keeping a close eye on what happens after the Chinese return after the holidays but we're expecting it to be positive."
Steel rebar futures in Shanghai closed at a record high of 5,124 yuan per tonne on Feb. 1, a day before China shut for the Lunar New Year holiday, driven by rising cost of iron ore and coal and expectations of a pickup in steel demand. ArcelorMittal, the world's largest steelmaker, on Tuesday forecast a faster than expected recovery in demand and prices at the start of 2011 after a margin squeeze in the fourth quarter.
"The gradual underlying demand recovery continues and we expect 2011 to be stronger than 2010," said Chairman and Chief Executive Lakshmi Mittal. The recent rally in spot iron ore prices is likely to push up second-quarter contract rates to a record $165 a tonne for Australian fines with 62 percent iron content, free on board, a Reuters poll showed.
SWAPS RISE
Platts' 62 percent iron ore index IODBZ00-PLT was flat on Monday at $187.25 a tonne, cost and freight delivered to China, a record level reached last week. The Steel Index (TSI) 62 percent iron ore benchmark .IO62-CNI=SI was also steady at $185.60 and Metal Bulletin's 62 percent gauge .IO62-CNO=MB was unchanged at $183.36. The market was mostly quiet at the start of the week with a few tentative inquiries, TSI said in a note, adding "activity can be expected to start picking up again gradually later in the week, as the holiday period comes to an end." The forward swaps market reflected investors' upbeat sentiment with prices gaining on Monday.
The Singapore Exchange-cleared February contract rose $1.50 to $184.75 a tonne, March climbed $2.12 to $176.37 and April gained $1.75 to $167.87. In India, iron ore futures were little changed after recent gains. At 0716 GMT, 62 percent ore for March delivery on the Indian Commodity Exchange eased 0.1 percent to 8,078 rupees ($178) a tonne, including freight cost to northern China. A similar contract on the Multi Commodity Exchange
was up 0.1 percent at 7,492 rupees a tonne, free on board. The two exchanges launched the world's first iron ore futures contracts on Jan. 29 but volumes have been modest with trading limited to domestic players.
($1 = 45.33 rupees)
(Reporting by Manolo Serapio Jr.; Editing by Manash Goswami)
Japanese No2 HMS prices rebound to JPY 38000 FOB level in Korean deals
TEX reported that transaction prices of No2 HMS have rebounded to a level of JPY 38,000 per tonne FOB in ferrous scrap exports out of Japan to South Korea in the wake of South Korean steelmakers' resumed moves to negotiate anew for Japanese ferrous scrap with positive bids.
South Korean steelmakers such as SeAH Besteel Corp, Daehan Steel Mill Co and Dongkuk Steel Mill Co collected offers to purchase Japanese ferrous scrap one after another last week. As a result, Daehan Steel firmed up is purchase of No2 HMS at around JPY 38,000 per tonne FOB. Also, Dongkuk Steel made a bid of JPY 38,200 per tonne FOB for No2 HMS by January 31st 2011. Meanwhile, trading company Posteel made a bid of JPY 42,000 per tonne FOB for P&S steel scrap in the fourth week of January. Posteel is a subsidiary of integrated steelmaker POSCO.
On their part, though, Japan's ferrous scrap suppliers indicate no hasty moves to firm up new export deals for shipments to South Korea. They believe that the current Korean bids for Japanese ferrous scrap are short on attractions, given the going FAS prices in the Tokyo Bay area. Besides, they see a strong possibility that transaction prices of Japanese ferrous scrap exports will further advance after the lunar New Year holidays in Asia.
In the third week of January 2011, Hyundai Steel Co made a bid of JPY 38,000 per tonne FOB for No2 HMS from Japan, down by JPY 500 from the earlier bid. Then, transaction prices of No2 HMS declined to around JPY 37,500 per tonne FOB. Even information circulated early last week that a new Japanese export deal of No2 HMS had shaped up at JPY 37,000 per tonne FOB for South Korea.
At the time, South Korea's various steelmakers as a whole looked set to hold back on new purchases of Japanese ferrous scrap after increased arrivals of domestic ferrous scrap at their works thanks to local dealers' realization sales before the lunar New Year holidays. Accordingly, there were enhanced signs of a continued downturn in Japan's ferrous scrap export market for new deals.
(Sourced from TEX Report Limited)
South Korean steelmakers such as SeAH Besteel Corp, Daehan Steel Mill Co and Dongkuk Steel Mill Co collected offers to purchase Japanese ferrous scrap one after another last week. As a result, Daehan Steel firmed up is purchase of No2 HMS at around JPY 38,000 per tonne FOB. Also, Dongkuk Steel made a bid of JPY 38,200 per tonne FOB for No2 HMS by January 31st 2011. Meanwhile, trading company Posteel made a bid of JPY 42,000 per tonne FOB for P&S steel scrap in the fourth week of January. Posteel is a subsidiary of integrated steelmaker POSCO.
On their part, though, Japan's ferrous scrap suppliers indicate no hasty moves to firm up new export deals for shipments to South Korea. They believe that the current Korean bids for Japanese ferrous scrap are short on attractions, given the going FAS prices in the Tokyo Bay area. Besides, they see a strong possibility that transaction prices of Japanese ferrous scrap exports will further advance after the lunar New Year holidays in Asia.
In the third week of January 2011, Hyundai Steel Co made a bid of JPY 38,000 per tonne FOB for No2 HMS from Japan, down by JPY 500 from the earlier bid. Then, transaction prices of No2 HMS declined to around JPY 37,500 per tonne FOB. Even information circulated early last week that a new Japanese export deal of No2 HMS had shaped up at JPY 37,000 per tonne FOB for South Korea.
At the time, South Korea's various steelmakers as a whole looked set to hold back on new purchases of Japanese ferrous scrap after increased arrivals of domestic ferrous scrap at their works thanks to local dealers' realization sales before the lunar New Year holidays. Accordingly, there were enhanced signs of a continued downturn in Japan's ferrous scrap export market for new deals.
(Sourced from TEX Report Limited)
Monday, February 7, 2011
Soaring metal prices hit scrap industry
NEW YORK (Scrap Monster): Soaring metals prices, especially copper have hit the scrap industry. According to metal recyclers the volume of scrap reaching their yard has been down for the last five years, there has been roughly a 50 percent less than in five years ago.
When metal prices took off scrap dealers cashed in, and prices have been high long enough that scrap inventory has been depleted. Also the lack of new residential and commercial construction in the region is preventing that inventory from being replenished.
The hike in copper prices is the best benchmark to analyze what has happened to the scrap market in recent years; Copper is currently trading at nearly $4 a pound, but for decades traded at 50 cents. China's exploding economy also is partly responsible for the demand for other metals with industrial use, steel, for example, is trading at $500 a ton, nwitimes.com reported.
Buyers anxious over scrap steel, HRC price movements
MUMBAI (Scrap Monster): Scrap steel prices have fallen from a high of $520 per ton to $440 while hot roll coil (HRC) prices are climbing. The market now presents some anxious moments to buyers as they fear a repeat of 2008 may occur with prices reaching a peak point and thereafter crashing.
Many analysts believe that the prices may hit a saturation point soon giving way to a deep slump, although it presents a great buying opportunity.
Many analysts believe that the prices may hit a saturation point soon giving way to a deep slump, although it presents a great buying opportunity.
UBS, premier global financial services firm, has forecast weak prices ahead for scrap metals. The major reason behind the price spikes in last the years is said to be the unaltered demand from Turkey which continues to be the leading importer of scrap metals from USA.
For the last four years from 2007, Turkey has been the largest buyer of scrap steel from United States. According to US commerce department and US census bureau, Turkey led the buying from 2007 to 2010 by accounting 19.8%, 20.8%, 16.1% and 18.6% respectively. Only in 2009, China surpassed Turkey accounting for 28% of US imports, while Turkey fared lower at 16.1 %.
For the last four years from 2007, Turkey has been the largest buyer of scrap steel from United States. According to US commerce department and US census bureau, Turkey led the buying from 2007 to 2010 by accounting 19.8%, 20.8%, 16.1% and 18.6% respectively. Only in 2009, China surpassed Turkey accounting for 28% of US imports, while Turkey fared lower at 16.1 %.
John Ambrosia in one of his analysis in Scrap Price Bulleting said that “It seemed like every time the market needed a bump, there was Turkey coming in and placing orders,” a New York-based domestic dealer said. “And each time we took a hit on scrap prices, it was because Turkey was out.”Throughout 2010, Turkish steelmakers made huge buy in the market averaging somewhere around 300,000 metric tons each month helping to create a seller’s market for most of last year.
So far this week 700 lots (14,000 tons) of HRC traded on the CME Group Domestic HRC futures contract. The vast majority of this week’s trades were for 2nd Half 2011 at $700. 32 lots of April/May traded between $745 and $750.
Futures traders remain cautious on HRC prices for 2nd Half 2011, waiting on the outcome of a variety of factors including the continued impact of the flooding in Australia on iron ore and metallurgical coal prices, the return of the Chinese buyers after the Spring Festival and the continued economic rebound in the U.S.
Recent floods in Queensland which ravaged many resources and an upward trend of global recovery has boosted the prices so far, according to many analysts it’s time up for the prices to give a pause while the global steel makers are increasing prices day by day.
Global economic recovery trends, rising equities and base metals in LME, NYMEX are providing further support for the HRC and steel scrap complex; and coupled with reasonable growth in developing economies, there is no reason for undue crash in prices.
Global economic recovery trends, rising equities and base metals in LME, NYMEX are providing further support for the HRC and steel scrap complex; and coupled with reasonable growth in developing economies, there is no reason for undue crash in prices.
Subscribe to:
Posts (Atom)