The following article about the Asian ferrous scrap markets comes to SMU from Damon Sun of Daido International:
After the Lunar New Year holidays in Asia, the finished steel market has been subdued. However the scrap markets have stabilized. The raw factors affecting scrap markets:
Negative Issue Affecting Ferrous Scrap in Asia:
1.) Iron ore prices have broken $60/dmt to about $57/dmt. There has been a bit more activity in the iron markets recently. However, I would discount the affect on the steel markets as a few larger mills in China are still under maintenance shutdowns.
2.) US dollar has been strong recently against the major Asian currencies.
3.) Finished demand is still poor in Asia and demand is poor.
Positive Issues Impacting Asian Scrap Markets:
1.) Korean steel mills have been more active recently purchasing Japanese scrap, which moves Taiwan to purchase more USA scrap materials.
2.) Russian ruble has strengthened from its lows and its impact on export sales of finished products has lessened.
3.) We are supposedly approaching the construction season in Asia
Looking into the Copper and Oil Markets for guidance shows we have bounced off the lows.
The recent pricing for containerized HMS into Taiwan at $225/mt and Thailand at $215/mt (South Central America scrap origins). There has not been any significant bulk activity in a few weeks from USA with last prices heard at $248/mt CFR levels.
I expect we will be range bound in scrap prices for next few months.
Damon SunRead more from Damon Sun
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