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Weekly scrap wrap: Prices weaken in Asia, steadier elsewhere - 1 May 2012

In North Asia’s scrap market last week, the purchase price the Korean mills were offering for Japanese scrap fell by ¥500/tonne ($6/t) week-on-week. Hyundai Steel bought H2 grade scrap at ¥32,000-32,500/t ($393-399/t) fob for June delivery. It also booked one US-bulk HMS 1 scrap cargo at $459/t cfr for June shipment and recently contracted to buy an estimated 10,000-20,000 t of Russian A3 grade scrap at $459/t cfr for June arrival. Domestic scrap buying prices in Korea also weakened.

Japan’s scrap price setter, Tokyo Steel Manufacturing, has held its domestic buying prices unchanged since 20 April. Trading of imported scrap in Taiwan and Southeast Asia remained thin last week. Offer prices for containerized HMS 1&2 80:20 from USA were around $445/tonne cfr Taiwan and $455-460/t cfr Vietnam and Singapore.

In Turkey, buyers dipped into US and European suppliers’ scrap stocks tentatively after abstaining from buying for more than a week. Around 70% of the total tonnage heard booked came from the US. US East Coast suppliers achieved sales at $450-453/t CFR Marmara, Iskenderun and Izmir for heavy melt.

In European and US markets the early May contract scrap sales to producers indicated slightly stronger levels on-month, a factor which could help prop up prices into Turkey. A sale concluded by a UK exporter also prompted optimism among suppliers, with the prices at $445/t CFR Iskenderun for 15,000t of HMS 1&2 80:20 and $460/t CFR Iskenderun for 5,000t of plate and structural.

In the US the May pricing environment began to form in late April with obsolete scrap sales being done at levels higher than early April. A deal for 35,000 long tons of shredded scrap was heard from a major New York shredder to an Ohio steel mill at $445/l.t delivered mill. Plate & structural and heavy melting scrap prices were also on the rise, up $5-10/l.t.

Market sentiment now points to sideways to up $10/l.t for May domestic market pricing. Deals on prime grades remain sideways from prior weeks. The influx of pig iron imports seen in the first quarter and the elevated supplies due to increased manufacturing have both worked their way through the system and prime inventory levels remain average.

 

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