GLOBAL FERROUS SCRAP - SteelMint

MONTHLY REVIEW DECEMBER 2020

Page No. Content

01

02

China implements new scrap import standards

What is the policy?

Global impact of new standards

South Asian Market Overview (India, Pakistan, Bangladesh)

Imported & domestic scrap prices

Metallics prices (DRI, pig iron) price trends

03

Semi-finished steel (billet) prices

India's domestic steel scrap index

04 Japan, South Korea and South East Asia (Vietnam & Indonesia)

Japan domestic scrap & export market overview

Japanese monthly scrap export tender results

SE Asia imported scrap price trends (Vietnam & Indonesia)

05 China and Taiwan

China: Domestic scrap & billet price trends

Taiwan: Domestic & imported scrap prices

Rebar price trends in Taiwan

06 Turkey, USA and Europe

Imported scrap price movements & deep-sea cargo deals

Turkey country-wise scrap imports

07 Ship-breaking (India, Bangladesh and Pakistan)

Ship breaking prices

08

Vessel import data

Imported scrap bookings recorded by SteelMint

Index

GLOBAL

FERROUS SCRAP

Copyright ©2020 SteelMint 2

China resumes steel scrap import after roll out of new policy

What is the policy? On 31st Dec'20, the Ministry of Industry and Information Technology jointly issued a notice to confirm the free import of recycled raw material for steelmaking with effect from 1st Jan'21. This measure has been taken to regulate the import management of recycled steel raw materials and promote the high-quality develop-ment of country's steel industry. Recycled steel raw materials that meet the standards of "Recycled Steel Raw Materials" (GB/T 39733-2020) are no longer regarded as solid waste and can be imported freely. However, products that do not comply with the national standards of "Recycled Iron and Steel Raw Materials" (GB/T 39733-2020) are prohibited.

Resumption of imported scrap bookings from Japan - Imported scrap bookings in China have regained momentum after Government lifted restrictions on few grades of scrap. A Chinese scrap trader had concluded a deal of 3,000 t of Japanese HS grade scrap at $485/t CFR China basis. It was negotiated before the New-Year holidays. However, now the imported scrap price to China is expected to go up further by $15-20/t.

China's largest steel producer Baowu Steel Group has launched a steel scrap processing plant with an annual capaci-ty of 2.8 mn t in Anhui province. This facility has been termed as a 'lights out factory' - meaning unmanned produc-tion- in the metals recycling industry.

Chinese domestic scrap prices rise - China's largest EAF steelmaker - Shagang Group has announced a price hike in scrap purchase for all grades today (11th Jan’21) by RMB 150/t ($23). As per company's new revision, scrap price for HMS (6-10 mm) stands at RMB 3,250/t ($501), inclusive of 13% VAT, delivered to headquarters.

Outlook- Chinese steelmakers expect to import initially around 6-7 mn t of scrap annually. However, country's scrap import volume is likely to reach around 12-15 mn t later. Chinese buyers are expected to focus more on higher grade scrap such as PNS and Busheling.

These in total may replace around 30 mn t of iron ore imports. China imported around 0.02 mn t of ferrous scrap in CY'20 as against 2.32 mn t in CY'17. Japan had occupied a share of 80% in China's scrap imports in CY'17.


Assessment Dec'20

Avg

Lowest Price in

Dec'20

Highest Price in

Dec’20

Nov’20

Avg

% Change

(m-o-m)

Dec’19

Avg

India

India imported scrap ($/t)

Shredded, CNF Nhava Sheva 430 400 (7th Dec) 465 (28th Dec) 345 25% 290

HMS 1&2 (80:20), ex UK, CNF Nhava Sheva 395 370 (7th Dec) 415 (28th Dec) 330 20% 270

India Domestic scrap (₹/t)

HMS (80:20) EXW Mandi 27,700 25,800 (1st Dec) 29,900 (29th Dec) 24,730 12% 20,435

HMS (80:20) EXW Mumbai 28,325 26,600 (1st Dec) 30,200 (31st Dec) 25,500 11% 21,715

Alang Ship yard melting scrap 29,110 27,300 (5th Dec) 31,200 (30th Dec) 25,805 13% 22,445

Indian Metallics (₹/t)

C-DRI exw Raipur 26,465 25,600 (10th Dec) 27,100 (29th Dec) 24,860 6% 18,430

P-DRI exw Raipur 25,540 24,900 (1st Dec) 26,100 (19th Dec) 23,930 7% 17,535

Pig Iron (Steel Grd) Exw Durgapur 33,945 30,700 (1st Dec) 35,800 (31st Dec) 30,320 12% 24,600

Indian Domestic Billet (₹/t)

Billet (DAP Mumbai) 39,340 37,400 (5th Dec) 41,700 (28th Dec) 35,500 11% 29,225

Billet (DAP Chennai) 41,040 38,400 (2nd Dec) 43,500 (31st Dec) 35,630 15% 29,630

Bangladesh

Bangladesh imported scrap ($/t)

Shredded, CNF Chittagong 445 415 (7th Dec) 475 (28th Dec) 360 24% 315

HMS 1&2 (80:20), CNF Chittagong 425 400 (7th Dec) 455 (28th Dec) 345 23% 290

Japanese H2 Bulk, CNF Chittagong 440 385 (7th Dec) 490 (28th Dec) 340 29% -

Bangladesh Domestic Scrap (৳/t)

Chittagong Ship yard melting scrap 39,800 34,000 (4th Dec) 35,300 (18th Dec) 34,430 16% 29,975

Bangladesh imported DRI ($/t)

DRI ex India, CNF Chittagong 405 390 (7th Dec) 415 (28th Dec) 360 13% 290

Bangladesh Domestic Billet (৳/t)

Billet (Exw Dhaka) 48,000 44,000 (16th Dec) 52,000 (2nd Dec) 42,850 12% -

Pakistan

Pakistan imported scrap ($/t)

Shredded 211, CNF Qasim 435 400(7th Dec) 470 (28th Dec) 345 26% 305

Pakistan Domestic Scrap (PKR/t)

Local Scrap Eq. to Shred, Exw Punjab 76,950 73,500 (1st Dec) 85,750 (29th Dec) 71,700 7% 63,875

Pakistan Domestic Billet (PKR/t)

Bala Biilet, Exw Punjab 95,700 92,000 (15th Dec) 106,000 (29th Dec) 92,200 4% 81,500

CC Billet, Grade 40 Exw Punjab 102,400 98,000 (1st Dec) 112,000 (29th Dec) 96,700 9% 88,000

CC Billet, Grade 60 Exw Punjab 104,200 101,000 (1st Dec) 113,000 (29th Dec) 98,100 6% 89,000

South Asia (India, Bangladesh and Pakistan)

Indian imported scrap trades slowed on higher offers: Indian buyers were cautious on high imported scrap offers and increased freight charges witnessing less trade activities throughout the month. Offers to India remained on higher side due to active participation from Bangladesh and Pakistan. Most of the buyers and steelmakers adopted wait and watch ap-proach. Pakistan based mills raised rebar offers following cost push: Imported scrap offers to Pakistan cross $400/t mark earlier in the month. This led to many steel mills shutting down due to scrap shortage.

Mills raised deformed bar offers by PKR 16,500/t m-o-m in Dec’20 due to a sharp hike in imported and domestic scrap prices.

Bangladesh’s mills remained active in container bookings over bulk: The country’s buyers’ opted for containerised scrap over bulk offers due to high prices while disparity between offers and bids kept mid-sized mills away from the market. 

Container shortage and tight scrap availability re-mained a global issue which kept the imported scrap price on a higher side. Finished steel prices re-mained unsupportive to imported scrap prices. 

Source: SteelMint Research


SteelMint’s domestic steel scrap index up 10% in Dec’20

SteelMint’s index for India’s domestic steel scrap stood at INR 33,500/t DAP Mandi Gobindgarh as on 31st Dec’20, up by 10% m-o-m.

Interstate scrap supply movement had affected badly owing to farmers’ protest and nominal shortage ob-served in the market. In addition, increasing sponge iron prices in eastern India also boosted market senti-ments

Limited transactions in the semi-finished and finished steel segments led to a nominal correction towards month-end. However, trade participants don't foresee any sharp price decline amid supply tight-ness. Additionally, advance freight cost compelled buyers to raise their bids for domestic scrap


Assessment Dec'20

Avg

Lowest Price in

Dec'20

Highest Price in

Dec’20

Nov’20

Avg

% Change

(m-o-m)

Dec’19

Avg

Japan

Tokyo Steel

Tahara Plant (JPY/t) 38,180 32,500 (1st Dec) 43,000 (26th Dec) 29,940 28% 24,335

Utsunomiya Plant (JPY/t) 34,955 29,000 (1st Dec) 43,000 (26th Dec) 27,060 29% 24,500

Kanto Tetsugan Tender (JPY/t) 38,710 - - 30,600 27% 25,807

South Korea

Bulk Japanese H2 Offers (JPY/t FoB Japan) 39,625 34,000 (4th Dec) 44,000 (24th Dec) 30,125 32% 26,500

Vietnam

Bulk Japanese H2 (CFR $/t) 430 375 (7th Dec) 470 (28th Dec) 330 30% -

Bulk USA HMS 1&2 (80:20) (CFR $/t) 445 395 (7th Dec) 480 (28th Dec) 335 33% -

Indonesia

P&S Scrap 40 ft container (CFR $/t) 390 345 (7th Dec) 445 (28th Dec) 320 22% -

Busheling scrap (CFR $/t) 410 370 (7th Dec) 450 (28th Dec) 340 21% -

Japan, South Korea and South East Asia

Tokyo Steel announced 11 rounds of scrap purchase price hikes in Dec’20 - Japan's leading EAF mill- Tokyo Steel had adjusted its scrap purchase price 11 times in Dec’20. By the end of the month the company was pay-ing JPY 43,000/t for Tahara plant in Central Japan and Utsunomiya plant which is located in Kanto region.  The Company had adjusted its scrap buying purchase price to the regional scrap market realities in order to secure the required volumes domestically. 

Bids in Japan’s monthly scrap export tender hit multi-

year high - Bids in Japan’s monthly Kanto scrap export

tender had increased to a multi-year high. A total of just

12,000 t of Japanese H2 scrap was awarded at an average

price of JPY 38,710/t ($371) up by $78/t m-o-m and both

the cargoes were booked by Vietnamese steel mills. 

South Korea's prominent buyer, Hyundai Steel, had raised

its scrap purchase bid to JPY 42,000/t FoB for H2, during

mid-Dec’20. Japanese suppliers had increased offers for

Japanese H2 scrap export and were cited in the range of

JPY 44,000-45,000/t FoB Japan.

Indonesian imported scrap market observed less trades- Indonesian scrap market remained mostly quiet due to disparity between offers and bids, as mills were unable to match the offer price. Hong Kong origin PNS offers were at $440-450/t level during the last week of the month.  Indonesia, an emerging ferrous scrap market, witnessed a new regulation impact it's ferrous scrap imports as the country observed a drop in its scrap imports by 11% m-o-m in Oct'20.

Vietnam’s imported scrap prices rose on strong buying interest- Scrap prices imported to Vietnam continued to move up throughout the month as increased overseas and domestic demand kept Vietnamese buyers active in the market.  Imported scrap offers observed a significant hike immedi-ately after Japan’s Kanto export tender result concluded earlier in the month. Offers reached up to $470/t for Japa-nese H2, while US origin HMS 1&2(80:20) stood at $480/t towards the closing of Dec’20.  Vietnam's economic growth accelerated towards the clos-ing of the year as overseas exports and manufactures have shown signs of coming out of the pandemic slump.



China & Taiwan

Assessment Dec'20

Avg

Lowest Price in

Dec’20

Highest Price in

Dec’20

Nov’20

Avg

% Change

(m-o-m)

Dec’19

Avg

China

Shagang 6-10 mm price DAP Jiangsu (RMB/t) 3,020 3,020 (21st Dec) 3,020 (21st Dec) 2,870 5% 2,700

Billet Exw Tangshan (RMB/t) 3,725 3,580 (3rd Dec) 4,020 (22nd Dec) 3,565 4% -

Taiwan

Domestic (HMS 80:20) (TWD/t) 9,575 8,400 (2nd Dec) 10,900 (30th Dec) 7,975 20% 7,750

Domestic Rebar (13 mm) (TWD/t) 17,800 16,400 (2nd Dec) 19,500 (30th Dec) 15,975 11% 15,950

USA HMS 1&2 (80:20) ($/t) 375 315 (2nd Dec) 450 (30th Dec) 295 27% 260

Japanese H2 ($/t) 400 335 (2nd Dec) 460 (30th Dec) 310 29% 270

Taiwan imported scrap prices rise- Due to the rapid re-

covery in demand at a time when supply is limited, the

price of US-sourced HMS 1&2 80:20 scrap in Taiwan had

surged to $450/t CFR Taiwan, towards the closing of the

month. Japan-origin H2 scrap had risen to $460/t CFR

Taiwan.

International scrap prices were robust over the past two

months, as supply has been tight in contrast to the strong

demand from steel producers. 

Taiwan domestic scrap prices up following global trend-

Feng Hsin Steel, Taiwan's largest rebar producer, has

also adjusted its scrap purchase price as the sharp rise in

global scrap prices exceeded market expectations.

The steelmaker had lifted its scrap buying price for local-

ly-sourced HMS 1&2 80:20 scrap by a total of TWD

2,700/t in Dec’20 and stood at TWD 10,900/t towards

the closing of the month.

It may be noted that the fourth quarter is the traditional

peak season for steel consumption in Taiwan, especially

for long steel, as many local construction contractors try

to complete their projects before the Chinese New Year.

Chinese domestic billet prices fell sharply towards month

end following futures drop: The billet prices in the Tang-

shan market (northeast China) witnessed fluctuations in

Dec’20 as the prices increased during the first three weeks.

However, a sharp drop was observed, due to a fall in Chi-

nese rebar futures, towards the closing of Dec’20.

Billet imports to China during Nov '20 broadly remained

unchanged as compared to Oct '20 and was recorded at

1.53 mn t. Vietnam, Brazil, Russia, India, Oman and Indone-

sia were the predominant exporters during the period un-

der consideration.

Chinese domestic scrap prices continued its uptrend-

Steel scrap supply tends to tighten up during

the winter months because the drop in temperatures

makes collecting and processing scrap more difficult.

China's domestic steelmakers are keen to stock up inven-

tories, not only for their short-term production but also

to have sufficient material set aside for the winter sea-

son. Shagang's decision also gave a confidence boost to

the scrap market and helped domestic scrap pric-

es to keep on strengthening.



Turkey, USA & Europe

Assessment Dec'20

Avg

Lowest Price in

Dec'20

Highest Price in

Dec’20

Nov’20

Avg

% change

(m-o-m)

Dec’19

Avg

Turkey

Bulk USA HMS, CNF Turkey ($/t) 435 380 (7th Dec) 475 (28th Dec) 315 38% 290

Billet CNF Iskenderun ($/t) 570 530 (7th Dec) 600 (28th Dec) 445 28% 410

Turkey country-wise ferrous scrap imports (in mn t)

Nov’20 Oct’20 Sep’20 Nov’19 Jan’20-Nov’20

Total Turkey Imports 2.01 1.85 2.13 1.63 19.95

USA 0.24 0.34 0.49 0.30 3.99

Netherland 0.35 0.22 0.28 0.36 2.78

Russia 0.19 0.20 0.24 0.10 2.10

UK 0.24 0.18 0.28 0.21 2.08

Others 0.99 0.91 0.84 0.65 9

Turkey- world's largest ferrous scrap importer, observed a slight rise of 9% to 2.01 mn t in Nov'20 as against 1.85 mn t a month ago, as per data recorded with SteelMint. Restocking ahead of winter holidays resulted in increased imports. The ma-jor suppliers were the US, Netherland and Russia.

Turkish imported scrap prices hit a nine-year high-Towards the closing of the month and year-end, major suppliers had closed their yards to enjoy holidays. Turkish buyers actively booked numerous deals in the first few weeks of the month.  Imported scrap prices to Turkey hit a nine-year high by the last week of Dec’20, witnessing a total hike of around $140/t in just one month and stood at $478/t CFR Turkey by the month end.  Turkey and the UK signed a historic free trade agree-

ment in Dec’20, which came into effect on 1st Jan'21.


Ship Breaking

Assessment Dec'20

Avg

Lowest Price in

Dec'20

Lowest Price in

Dec'20

Nov’20

Avg

% Change

(m-o-m)

Dec’19

Avg

India

Tanker ($/LDT) 410 390 (7th Dec) 430 (14th Dec) 355 15% 375

Container ($/LDT) 420 400 (7th Dec) 440 (14th Dec) 365 15% 385

Pakistan

Tanker ($/LDT) 420 400 (7th Dec) 430 (21st Dec) 375 12% 365

Container ($/LDT) 430 410 (7th Dec) 440 (21st Dec) 385 12% 375

Bangladesh

Tanker ($/LDT) 420 410 (7th Dec) 425 (21st Dec) 370 14% 375

Container ($/LDT) 430 420 (7th Dec) 435 (21st Dec) 380 13% 385

Ship Breaking country wise import

India Pakistan Bangladesh

Dec'19 138,316 23,772 141,570

Jan'20 217,740 11,875 180,564

Feb'20 177,419 20,159 288,467

Mar'20 76,559 2,484 131,030

Apr'20 - 1,284 -

May'20 78,003 - 73,120

Jun'20 243,809 102,448 312,856

Jul'20 339,707 87,254 190,082

Aug'20 167,715 67,495 73,223

Sep'20 75,217 205,189 28,876

Oct'20 151,267 164,554 199,055

Nov’20 150,934 121,796 57,241


Ship breaking

Ship breaking offers in the Bangladeshi market were in-

creased with rise in steel scrap demand and domestic steel

prices.

India remained the best recycling destination but due to

volatile steel plate prices in the domestic market, buyers

were force to think twice to secure any fresh vessels.

Pakistan ship breaking market left empty handed in the last

week of Dec’20 with no units being secured after large im-

pressive sales in the several weeks. While Pakistan once

again emerged as the top buying recycling market with

increased demand for large LDT units.



Imported scrap bookings in Dec’20

NA=Not Available, The deal tables includes only those deals which are recorded by SteelMint

Ms. Rashi Shejwalkar (Research Associate) Email: [email protected]

Disclaimer

SteelMint has taken due care and caution in compilation of content. Information is just for reference not intended for trading purpose or to address your particular requirement. The content includes facts, views, and opinions are of individuals and not that of the SteelMint management. We and our content licensors do not guarantee or warrant the accuracy, completeness or timeliness of, or otherwise endorse these views, and opinions. SteelMint and its affiliates, or their employees, directors or agents shall not be liable or responsible for any loss or costs or any action whatsoever arising out of use or relying on the spot prices disseminated.

CONTRIBUTORS

Ms. Reena Nishad (Sr. Research Associate) Email: [email protected]

The below table highlights the bulk scrap bookings recorded by SteelMint, which were booked in Dec by Turkey, Bangladesh,

Vietnam and China. Deals indicated under India are those of containerized scrap bookings.

Turkey

S.no Date Origin Grade Quantity in (t) Avg Price in ($/t), CNF

1 1st Dec'20 Baltic HMS(80:20)+ Baltic NA 363

2 1st Dec'20 Russia HMS(80:20)+ Bonus

+ Rail 31,500 375

3 2nd Dec'20 USA NA NA 365

4 5th Dec'20 Russia HMS(80:20) NA 370

5 5th Dec'20 Baltic HMS(80:20) + Mix 25000 380

6 8th Dec'20 Europe HMS(80:20) 14,000 370

7 8th Dec'20 Europe HMS1 + (80:20)+

shredded 35000 385

8 8th Dec'20 Europe HMS(75:25) + Mix 30000 385

9 11th Dec'20 Europe HMS(75:25)+ Mix 37,500 398

10 11th Dec'20 Europe HMS(75:25)+ Mix 37,500 400

11 13th Dec'20 Europe HMS(80:20)+ shredded NA 424

12 15th Dec'20 Europe HMS(80:20) + Bonus NA 426

13 16th Dec'20 Europe Busheling+ Bonus 12,000 444

14 16th Dec'20 USA HMS(80:20) +Bonus NA 440

15 17th Dec'20 Russia HMS(80:20) + Bonus NA 449

16 18th Dec'20 USA HMS(80:20) + Mix 32500 460

17 18th Dec'20 UK HMS(80:20) NA 455

18 22nd Dec'20 Europe HMS(80:20) + Mix NA 476

19 22nd Dec'20 Europe HMS(80:20) + Mix NA 466

20 22nd Dec'20 USA HMS(80:20) NA 464

21 22nd Dec'20 Europe HMS(80:20) + Mix 23,000 476

22 23rd Dec'20 Russia A3 10,000 470

23 24th Dec'20 USA HMS(80:20) + Mix NA 478

Bangladesh

1 9th Dec’20 USA Mix NA 395

2 15th Dec'20 Australia HMS(80:20)+mix 20,000 421

India

1 9th Dec'20 NA Shredded 5,000 404

2 9th Dec'20 NA Busheling 2,000 420

3 19th Dec'20 NA Shredded 2,000 440

4 19th Dec'20 NA Busheling 2,500 475

5 31st Dec'20 Australia +NZ Shredded 2,500 465

Vietnam

1 3rd Dec’20 Australia HMS (80:20) 20,000 380

2 3rd Dec’20 Japan H2 10,000 360

3 7th Dec'20 Japan H1:H2 5,000 375

4 20th Dec'20 USA NA NA 485

5 28th Dec’20 USA HMS (80:20) 32,000 475

China

1 28th Dec’20 Japan HS 3000 488

2 29th Dec’20 Japan HS 2500 NA

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