Ferrous scrap into SE Asia leaps to eight-month high

By Megawati Wijaya Published: Jan 7 2011 6:42PM SINGAPORE --


Ferrous scrap offers into Southeast Asia reached an eight-month high in the first week of January amid a tightening in supply. Offers for the 80/20 mix of No. 1 and No. 2 heavy melting steel scrap in containers from Europe and the United States now stand at $470 to $490 per tonne delivered, up from $425 to $440 per tonne delivered two weeks earlier, trading sources said.
However, no bookings have yet been confirmed for containerized scrap. Offering prices last reached this level in mid-April last year, when offers were at $480 to $500 per tonne delivered. New offers of break-bulk cargoes of ferrous scrap have surged to $520 per tonne delivered, up from $450 to $460 per tonne delivered two weeks ago.
"There is a shortage of scrap because of the winter in Europe. All suppliers are raising prices," one Singapore-based trader said. "We heard some offers from South Africa at $450 per tonne delivered, but they were withdrawn. The suppliers may want to raise prices too," an Indonesian mill executive said. 
"Demand is so-so. We have not confirmed any sales. But to be honest, we are not keen on selling either. Prices could easily hit $500 per tonne delivered by the Chinese New Year," a trader in Singapore said. "People are looking for scrap, but they must also wait for their loans to be approved by the banks," a trader in Vietnam added. Bookings were confirmed two weeks ago at $410 to $420 per tonne delivered, a four-month high. Bulk cargo buyers from Turkey reportedly bought at $490 per tonne delivered in the past week vs. $450 to $460 per tonne two weeks earlier. All market participants say scrap prices have yet to peak. "No doubt prices can go up more. Winter will last a few more weeks, and prices will continue going up," the Vietnam-based trader said. "It's scary to think how the mills will survive with such high prices of scrap," she added.