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Scrap import prices continue to nosedive in East Asia - 28 October 2011

The slide in scrap import prices as well as concerns over liquidity are affecting East Asian scrap buying. Tokyo Steel’s continuous lowering of its purchase scrap prices is causing nervousness in the market. Korean purchase price for H2 grade scrap is now at ¥27,500/t ($362/t) fob based on Tokyo Steel’s latest prices.

Containerized 80:20 HMS 1&2 scrap from the US sold recently at $415-420/tonne cfr Taiwan, down from around $425/t cfr earlier this week and $430/t cfr last week. Containerized 80:20 from the US is being offered at $420-425/t cfr Singapore/Malaysia.

“The Vietnamese have demand requirements because their scrap inventory levels are low. But they don’t know at what price to buy scrap because it is going down so quickly,” a local trader tells Steel Business Briefing. Containerized 80:20 from West Africa has been booked at $415/t cfr Vietnam. Offers from Australia and the US are at $435-438/t cfr, bids at $425/t cfr, he says.

Bulk 80:20 prices are estimated at $440-450/t cfr East Asia but offers are few. A Chinese trader says this is the prevailing price for shredded scrap. Some traders report hearing Korea's Hyundai Steel purchasing its second bulk cargo a week ago at $451/t cfr following its first booking at $455/t cfr. Korean trading sources say $451/t is a “high” price today.

Weak steel demand is also restricting scrap buying. Stocking up on raw materials is hurting mills suffering from an already tight liquidity situation. "The price swing for scrap is too great. Nobody dares to buy too much as they face problems in liquidity as well as storage too," a Malaysian mill manager says.

 

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