Steel Market Update has been working on being able to provide more (and higher quality) information about the Asian scrap markets. Recently, we were introduced to a major Asian scrap player who provided us some insights to the current market situation:

“While the global market was moving up in May, Tokyo Steel dropped prices for 3 consecutive weeks. Tokyo Steel raising prices last 2 weeks is more a delayed reaction to global situations. It is recognized that the global scrap prices have been rising over the last month, however, finish steel product demand is still very slack. Let’s say its buy as needed inventory situation on scrap markets while the major basis is finish product pricing driving scrap pricing more at moment.

Korean pricing is on slight downward trend.

Taiwan is on downward trend

China is slight downward trend

Thailand – never moved up or down but lack buying

Vietnam – stable (limited origin points for container shipments to Haiphong)

Malaysia – slack buying but slight upward necessity on shredder

We don’t monitor India/Indonesia closely. Also Chinese buying iron ore is subdued despite lower price trends on iron ore.

While East Coast scrap suppliers are expecting a $15-$20/ton increase in July, West Coast is not as optimistic (driven by export market vs. local steel mill demand). West Coast FAS pricing has dropped $10-$15 off the high in recent weeks. East Coast optimism may be subdued depending on Turkish buying into July. I am not that optimistic as my feeling is Turkey will go short haul cargoes (Europe/Black Sea).

Deform bar demand is just poor at the moment globally.

Expectations is August/September pickup on the scrap trade as summer months wind down, and Asian curtailment of electricity lifts in end September. Japan rebuilding likely will impact scrap in Q4.

Short answer – Tokyo Steel is several weeks behind on the global market situation.”

Originally published in Steel Market Update newsletter on June 30, 2011