Asia ferrous: Price steady

Taiwan's containerised scrap price was steady on Monday as buyers await firm offers from US suppliers, which were away on a national holiday and will be back on 5 July. The Argus daily containerised HMS 1/2 80:20 cfr Taiwan assessment remained at $360/t cfr on Monday — the index has fallen by $75/t so far this month.

No spot trades were concluded today. And buyers maintained a bleak outlook for the ferrous seaborne scrap complex, declining to make any firm bids. A gloomy demand outlook and recent bearish developments in China have also weighed heavily on ferrous scrap sentiment, as Chinese mills are still nursing losses and curbing production.

On 2-3 July, Chinese property developer Shimao Group said it could not honour its interest and principal repayment of $1.23 billion, which was due on 3 July. Citing the impact of Covid-19 and a change in the macro-environment in the property sector since the second half of 2021, the group said contracted sales have plunged by 72pc on the year in January-May.

"I don't see any upside at all. I doubt anything positive will happen this week, so we will stay out of the spot market," a Taiwanese steelmaker said today.

Inclement weather also piled on to the bearish sentiment, trade sources said. According to the latest press release from Taiwan's central weather bureau, temperatures for July-September will be close to, or even above, the previous year's average, and warned citizens to be prepared for the coming typhoon season, as well as summer heatwaves and lightning strike hazards.

While some major steelmakers declined to give a firm bid today, others said a fair, indicative value would be around $350/t and lower.

But traders said they are optimistic of a price rebound this week. "Prices have plummeted so much in the recent months so we expect some form of correction this week," a trader said, adding that there is not much room for price negotiation at the moment.

Another seller added that an improvement in Turkish scrap import prices would buoy sentiment in Asia. On 1 July, Argus assessed the daily HMS 1/2 80:20 cfr Turkey steel scrap assessment at $370.50/t cfr, up by $10.50/t on the previous day. No offers of scrap from other origins were heard today.

Taiwanese domestic benchmark price setter and electric arc furnace (EAF)-based steelmaker Feng Hsin announced today that it will lower its domestic scrap and rebar prices by 300 New Taiwanese dollars/t ($10.08/t) to NT$11,900-12,000/t and NT$20,700/t, respectively.

Vietnam

Market participants anticipate that Vietnamese buyers will show limited interest for imported scrap this week. Competitive deep-sea bulk offers have mostly disappeared after the recent rise in Turkish prices, while Japanese scrap offers were still higher than buyers' target levels.

Domestic scrap prices in Vietnam decreased further by 200 dong/kg ($8.60/t) on 2-3 July and today stood at $351-364/t south Vietnam, the lowest since early 2021. In light of slipping steel prices and rising production costs, EAF-based mills were forced to cut production to support steel prices and cut scrap purchase prices. "We need more than $180/t for scrap-billet spread now," an EAF mill said.