The following article was written by contributing writer Damon Sun of Daido International.
The Asian ferrous scrap markets are still very weak, but there are some positives recently.
Rebar demand seemed to have picked up some in the last two weeks and consequently, there has been more activity in the containerized scrap markets. For reference, the low on containerized HMS to Taiwan has been about $135/mt CFR and has picked up to between $142-$145/mt CFR off the lows. Whether this is more of a dead cat bounce, or the start of a trend remains to be seen. I personally feel its more a short term blip while the overall trend remains weak. Turkey bulk prices did bounce off the lows as well, but I still think it’s a short term blip.
The raw components of overall steel inputs are still weak.
a.) Iron ore still trending weaker and last prices below $50/dmt. (down approx $5-$6/dmt since recent stability point).
b.) US dollar to Asian fluctuations have been trending toward a stronger dollar.
c.) Japan scrap prices are still trending lower, with Tokyo Steel dropping 500 Yen on Monday 11/2/2015.
d.) Major scrap importing countries are still in lackluster demand for imports.
e.) China finished steel demand is still poor, with their export quotations still trending lower. (Ref: Tangshan small square billets abt $250/mt cfr quotes.
The overall short term tendencies by the mills is leaning towards reduction on production rather than importing higher price scrap.
Some protectionist measures are starting to take into affect with some limited benefits into steel prices, but overall things are still looking poor.
The optimism of recent higher oil prices affecting other commodities has worn off as well.
So despite heading into the winter months where scrap prices are traditionally stronger…. I do not see this happening this winter.
Damon SunRead more from Damon Sun
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