Weak steel demand, semis imports pressure Asia scrap
Asian seaborne ferrous scrap suppliers face mounting pressure from lower steel demand across most Asian countries and competitive imports of semi-finished steel products into the region.
The impact of the China-US trade dispute has contributed to a wider weakening of Asian economies, where infrastructure project development has slowed and automotive demand has fallen.
Weak domestic steel demand and low prices in Asia have driven electric arc furnace (EAF)-based steel producers to seek cost cuts, with lower scrap prices being their main focus.
East Asia: Sharp price falls
The Argus cfr Taiwan containerised HMS 1/2 80:20 assessment has dropped by $70/t, or 23pc, in the past six months, to $238/t today from $308/t on 22 March, reflecting a drop in demand from Taiwanese steel producers.
This is the lowest assessment level since 2 June 2017.
South Korean mills purchased bulk scrap cargoes from the US west coast at $275-$281/t cfr in the first half of this month, down by $27-33/t from the previous known concluded deal of $308/t in late August. They were also able to drop Japanese H2 scrap prices by ¥1,000/t to ¥26,000/t. South Korean mills will most likely attempt to push scrap prices down further as the bearish domestic and export steel demand outlook persists.
In Japan, scrap suppliers came under pressure from domestic and overseas buyers. Steelmaker Tokyo Steel reduced domestic scrap prices three times in the past two weeks, citing low domestic and export steel demand. Coupled with lower demand for Japanese scrap from South Korean mills, this forced Japanese scrap suppliers to reduce offers in the seaborne market. Bids in the September Kanto tender fell by ¥2,000/t to ¥24,500/t.
Southeast Asia: Competitive steel offers weigh
Vietnamese mills are under increasing pressure to reduce scrap prices as they face rising competition from steel imports and sluggish domestic sales of their own steel products.
Billet offers from Turkey and India were heard at $410/t cfr southeast Asia last week, while suppliers from Malaysia and Russia's far east offered $420/t cfr southeast Asia and $417/t cfr Philippines, respectively. Domestic billet offers in Vietnam were heard at $420-422/t ex works. Japanese mills are known to have offered billet to Taiwan at $405/t cfr Taiwan.
And offers of Turkish material have continued to fall this week. A trading firm offered Turkish billet at $405-410/t cfr southeast Asia, which was met with bids of $390-395/t cfr.
Billet offers from Turkey to southeast Asia are a concern to steelmakers in countries that do not have safeguard restrictions on Turkish products. Cheaper availability of billet gives re-rolling mills in southeast Asia a competitive advantage over EAF-based mills that produce rebar from scrap. This has forced EAF-based mills to lower scrap prices in order to stay competitive.
The flats market is also under pressure. Vietnam's sole coil producer, Formosa Ha Tinh Steel, reduced domestic hot-rolled coil prices by $51/t for November.
The most recent offer of Japanese H2 scrap to Vietnam was $260/t cfr, $18/t lower than the last concluded price of $278/t. Mills were expecting offers to drop after the September Kanto tender result, but suppliers' offers remained unchanged. But a fall in scrap offer levels from US suppliers will place additional pressure on Japanese suppliers. Offers of US bulk scrap were heard today at $263/t cfr Vietnam. But Vietnamese buyers continued to show no interest in this level.
Indonesian steelmakers have taken advantage of the sharp movement in seaborne prices to purchase more scrap from Australia. Australian steelmakers had to divert cargoes to Indonesia after previous sales to Bangladesh at prices of more than $300/t were cancelled by buyers when prices dropped sharply.
Demand likely to stay low until next year
EAF-based producers have been unwilling to purchase large quantities of scrap while prices continue to fall.
Southeast Asian mills expect that Turkish steelmakers have only a small margin on any billet business at current levels with an imported scrap price of $240/t cfr Turkey, which means that Turkish mills with a focus on southeast Asian billet sales will be unlikely to accept a scrap price above that level. The Argus daily HMS 1/2 80:20 cfr Turkey yesterday fell by $7.70/t to $233.30/t.
Consequently, global seaborne scrap prices look likely to remain low until late into the first quarter of 2020. Various holidays in different countries in the December-January period may interfere with buyers' purchasing cycles, making it more difficult for suppliers to do business if demand does not pick up in the near future.
Any further deterioration of steel demand in Asia will likely push the region's seaborne scrap prices lower.
Related news posts
Australia’s Pilbara Mining sees continuing Li demand
Australia’s Pilbara Mining sees continuing Li demand
Singapore, 19 April (Argus) — Australian mining firm Pilbara Minerals' sees continuing lithium demand from its customers, while the firm continues to focus on cost optimisation. Pilbara in March accepted a pre-auction offer of $1,106/dry metric tonne (dmt) for 5,000dmt of 5.5pc-grade lithium concentrate (spodumene) cif China. The price equates to approximately $1,200/dmt 6pc-grade lithium concentrate (spodumene) cif China, said Pilbara, which reflects the "ongoing demand and positive pricing for unallocated production volume". "When you look at the past 60 days up to mid-April, the increases [in lithium prices] are fairly material," said the firm's managing director and chief executive Dale Henderson during the latest quarterly earnings call, adding that the recent uptick in lithium pricing is "comforting". Argus -assessed prices for 6pc-grade lithium concentrate (spodumene) held stable at $1,100-1,200/t cif China on 16 April from a week earlier, rebounding from an all-time low of $850-1,050/t on 27 February. But a standoff has more recently formed between spodumene producers and lithium refineries, with the former maintaining their offer prices and consumers rejecting them. Pilbara's spodumene realised price in January-March fell by 28pc on the quarter to $804/dry metric tonnes (dmt) cif China, despite the average grade of spodumene shipments rising by 0.1 percentage point to 5.3pc, which translates to $927/dmt for 6pc-grade lithium concentrate (spodumene). But the realised price during the quarter remained above its unit operating cost of $519/dmt cif China, which fell by 1pc on the quarter. Pilbara's ending cash balance came in at A$1.8bn ($1.15bn) as at 31 March, down from A$2.1bn a quarter earlier. Output Pilbara's output during January-March rose by 2pc on the quarter and by 21pc on the year to 179,000dmt. The output was propped up by a record monthly production of over 80,000dmt in March, partly because the P680 primary rejection facility reaching its nameplate production capacity in the second half of the quarter. But its chief operating officer Vince De Carolis said the peak performance should not be construed as an annualised run rate. The firm said it is not stockpiling its production volume as it sees "ongoing customer demand". Pilbara's spodumene sales volumes rose by 3pc on the quarter and by 14pc on the year to 165,121dmt for an average 5.3pc grade. Pilbara earlier in February defended its lithium downstream strategy and last month signed a binding agreement with Chinese refiner Ganfeng to carry out a joint feasibility study as they explore building a downstream conversion plant. The two firms are exploring building a lithium hydroxide and/or lithium carbonate conversion plant with 32,000 t/yr of lithium carbonate equivalent capacity, alongside a potential intermediate lithium chemical facility in the country. By Joseph Ho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Coal sales at Australia’s Whitehaven fall in Jan-Mar
Coal sales at Australia’s Whitehaven fall in Jan-Mar
Sydney, 19 April (Argus) — Australian coal miner Whitehaven reported higher production but lower sales in January-March, with the firm increasing its percentage of high-grade thermal coal sales from the previous quarter. Saleable coal volumes rose by 8pc on the year to 3.9mn t but managed coal sales fell by 7pc to 3.8mn t compared to a year earlier. Sales were 83pc high-grade thermal, higher than 72pc in October-December and 68pc a year earlier. Whitehaven said run-of-mine production at Narrabri was below expectations because of the current panel's geological challenges, leading to reliability and maintenance problems with equipment. Whitehaven's overall sales guidance for the 2023-24 fiscal year remains unchanged at 16mn-17.5mn t for 2023-24 with a unit cost guidance, excluding royalties, of A$103-113/t ($66-$72/t) which the firm said is tracking at the top end. This is because of lower output from Narrabri, which is tracking below its output guidance of 5.1mn-5.7mn t for the fiscal year to 30 June. Whitehaven finalised takeovers of Australian-Japanese joint venture BHP Mitsubishi Alliance's (BMA) 12mn t/yr Blackwater and 4mn t/yr Daunia coking and thermal coal mine in Queensland on 2 April, with initial sales and production data to be reported in its April-June production report. The two mines are anticipated to deliver 4.5mn-5mn t run-of-mine output in April-June, with Whitehaven's revenue breakdown to be 70pc metallurgical and 30pc thermal on an annual basis post-acquisition as it seeks to pivot toward coking coal. Blackwater and Daunia contributed 10.11mn t and 4mn t respectively to BMA's total output in 2023. Whitehaven plans to sell down a 20pc stake in Blackwater to global steel producers, with a process presently underway. Whitehaven views the high calorific value (CV) thermal coal market as well supported in its key Asian markets, and said tightening of sanctions on Russian exporters is containing global supply. India's continuing growth is driving demand and underpinning price sentiment, Whitehaven said, despite a softening in metallurgical coal prices during the quarter . The Argus high-grade 6,000 kcal/kg NAR price averaged $126.74/t fob Newcastle and the 5,500 kcal/kg NAR coal price $93.85/t during January-March, compared with $134.23/t and $96.80/t respectively for October-December. By Tom Major Whitehaven quarterly results Jan-Mar '24 Oct-Dec '23 Jan-Mar '23 Volumes (mn t) Managed coal production 3.9 4.2 3.6 Managed coal sales 3.8 4.7 4.1 Managed coal stocks at period end 1 1.5 1.5 Coal sales mix (%) High-grade thermal coal 83 72 68 Other thermal coal 8 19 26 Metallurgical coal 9 9 6 Prices achieved ($/t) 136 142 280 Thermal coal 136 142 280 Metallurgical coal 213 166 234 Source: Whitehaven Australian coal price comparisons ($/t) Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
ISRI rebrands to ReMA, drops scrap from name
ISRI rebrands to ReMA, drops scrap from name
Las Vegas, 18 April (Argus) — The Institute of Scrap Recycling Industries (ISRI) has rebranded to the Recycled Materials Association (ReMA). The new name and rebrand better reflect the evolution within the recycling industry and its member companies, ReMA said at the group's annual convention and exposition in Las Vegas today. Washington, DC-based ReMA represents recycling industries including ferrous and nonferrous metals, electronics, glass, paper, plastics, textiles and tires and rubber. It is a member-driven trade organization that provides advocacy, education, safety and compliance training, and promotes public awareness of the vital role recycled materials play in the US economy, global trade, the environment and sustainable development. ISRI was formed in 1987 when the Institute of Scrap Iron and Steel merged with the National Association of Recycling Industries. Over the last 35 years, the association has seen tremendous growth in size and diversity of its membership, particularly in electronics, consumer brands and EV battery sectors. The trade association has around 1,700 member companies across the US and other 40 countries. By Brad MacAulay Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia provides $256mn to high-purity alumina plant
Australia provides $256mn to high-purity alumina plant
Sydney, 17 April (Argus) — Australia's federal Labor government will offer A$400mn ($256mn) in loans to a high-purity alumina (HPA) processing facility, as part of its recently announced Future Made in Australia policy. Canberra has granted Australian developer Alpha HPA the funds via two separate agencies. The Northern Australian Infrastructure Facility and Export Finance Australia's (EFA) A$4bn critical minerals facility will each offer A$160mn and the two agencies will jointly fund a further A$80mn cost overrun facility, with drawdown on the grants contingent on Alpha HPA securing letters of intent for 10,000 t/yr in output. The announcement comes after the Queensland government provided A$21.7mn for the second stage of the facility at the industrial city of Gladstone in Queensland state. Australia's other HPA producer is Cadoux, formerly FYI Resources , is planning a 10,000 t/yr operation in Western Australia (WA) state's Kwinana industrial zone. The firm received an A$3mn grant from the WA government in November for an initial small-scale production plant. Graphite grant Canberra also brought forward an A$185mn EFA loan to Australian emerging graphite producer Renascor for stage 1 of its proposed vertically integrated battery anode material manufacturing project. A downstream graphite concentrator plant is planned for South Australia state with feedstock from the Siviour deposit, the largest outside Africa, Renascor said on 17 April. The original loan was approved in 2022, and Canberra said the concentrator project will now be realised sooner. Stage 2 will produce Australian-made purified spherical graphite for use in lithium-ion batteries required for electric vehicles and renewable technologies, Canberra said. Renascor is progressing advanced engineering designs for the mineral processing plant and non-process infrastructure while discussing binding offtake terms with existing partners, as well as with other battery-anode market participants. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more