Day: 27 December 2021

Most near-term scrap and rebar futures contracts on the London Metal Exchange saw losses over the week to Dec. 23, while trading volumes increased.

Platts assessed the December scrap contract up $3/mt week on week at $464/mt on Dec. 23. The January contract decreased $2/mt to $451.50/mt. The February contract fell $9/mt week on week to $440.50/mt. The March contract dropped $7/mt to $435/mt.

The backwardated structure for the December-February forward curve strengthened week on week, suggesting that futures traders are firmer on their expectations of a further near-term drop in physical scrap prices.

The backwardation over the February to March portion of the forward curve softened.

Spot prices for physical imports of premium heavy melting scrap 1/2 80:20 dropped $4/mt week on week to $461/mt CFR Turkey on Dec. 23, as several scrap cargoes were heard booked the week started Dec. 20.

The Turkish lira strengthened sharply against the US dollar over Dec. 20-22 after President Recep Tayyip Erdogan said the government would cover losses for lira deposit holders, should lira losses against foreign currencies exceed banks’ interest rates.

Market sources expect this appreciation in the currency against the dollar to subsequently improve demand for scrap cargoes. Sources said four mills were actively seeking further January shipment cargoes, with some also keen to buy for February shipment.

“Since yesterday, mills are actively looking for January shipments, and Christmas is at the door, so I think we already touched the bottom,” one agent source said.

Weekly LME scrap futures trading volumes over the week to Dec. 23 totaled 31,360 mt, up from 22,300 mt recorded the previous week.

Most near-term rebar futures contracts also saw losses over the week to Dec. 23. Platts assessed the December contract down $2.50/mt week on week at $694.50/mt on Dec. 23, while the December contract lost $4/mt to $685.50/mt. The January contract dipped 50 cents/mt to $679/mt, and the February contract rose $4.50/mt week on week to $674.50/mt.

The backwardated structure of the December-January portion of the forward curve strengthened slightly week on week, suggesting that futures traders expect further near-term downtrend in physical prices.

The backwardation over the January to March portion of the forward curve softened suggesting that futures traders expect the physical price downtrend over the period to be less drastic than previously anticipated.

Turkish physical rebar export prices were stable at $690/mt FOB on Dec. 23, after a drop to $682.50/mt on Dec. 20, as Turkish mills tried to maintain workable levels for rebars in the export market despite slow demand. Though market sources also reported a fresh deal totaling 15,000 mt to Germany by a Marmara mill, overall the market remained quiet while the Turkish lira recovered from record lows.

Rebar futures weekly trading volumes on the LME totaled 13,930 mt, up from 12,850 mt traded volume the previous week.

Elsewhere, Indian scrap futures saw three consecutive days of trading over Dec. 20-22, with a total of 180 mt traded. A total of 2,850 mt has traded so far on the contract, which settles basis the Platts CFR Nhava Sheva shredded scrap index, since its launch in late July.

The daily outright spread between Turkish export rebar and import scrap was assessed at $229/mt Dec. 23, up $4/mt week on week.

— Rabia Arif

Asian stainless cold-rolled coils increased in the week to Dec. 24, supported by stronger nickel prices and improved sentiment led by strengthening Chinese domestic market.

S&P Global Platts assessed 304 grade 2 mm 2B stainless CRC at $3,120/mt CFR East and Southeast Asian ports Dec. 24, up $15/mt on the week.

Nickel prices strengthened and rose above the $20,000/mt mark again during the week. The official nickel cash price on the London Metal Exchange settled at $20,175-$20,180/mt Dec. 23, up $595/mt on the week.

Chinese domestic market continued its slight rebound, which made market participants believe prices would be more stable before the Lunar New Year holidays, as traders would start to leave the market since early January.

Market inventory remained relatively low, which would continue to support the spot market along with strong raw materials, said a Chinese trader.

One Chinese mill was heard offered about $2,900/mt FOB for 304 CRC for end-February and early March shipment. The offering level for 304 CRC for immediate delivery should also pick up but there were no buying activity due to the holidays, said another Chinese trader. “Buyers would return after the New Year holidays,” he said.

The most actively traded February 2022 stainless steel contract on the Shanghai Futures Exchange closed at Yuan 16,770/mt in the morning session on Dec. 24, up Yuan 775/mt, or 4.8%, week on week. The futures had been up for two straight weeks after downward corrections seen since late October.

— Staff

Turkish steel mills continued to cut their lira-denominated domestic scrap buying prices for the third consecutive day on Dec. 24, as the currency continued to strengthen after the government announced support measures Dec. 20.

Turkish deepsea import ferrous scrap prices inched up on Dec. 23, as a fresh Venezuela-origin cargo was booked. S&P Global Platts assessed Turkish imports of premium heavy melting scrap 1/2 (80:20) Dec. 23 at $461/mt CFR, up $1/mt on the day. The index has fluctuated in a $460-$465/mt CFR range since Dec. 15.

Colakoglu, one of Turkey’s largest EAF-based steelmakers, cut its domestic buying price again for DKP grade (auto bundle) scrap in this sentiment to Lira 6,055/mt ($510) on Dec. 24, while the company’s extra grade domestic scrap buying price fell by the same amount to Lira 5,580/mt ($470/mt). The exchange rate was Lira 11.9/$1 on Dec. 24 at 12 pm Turkey Time.

The DKP scrap buying price for one of Turkey’s largest alloy steel producers, Asil Celik, was set at Lira 5,965/mt ($502/mt), while the company’s extra grade domestic scrap buying price fell to Lira 5,200/mt ($438/mt).

Kardemir, Turkey’s integrated long steelmaker pulled down its extra grade domestic scrap buying price to Lira 6,115/mt ($516/mt) on Dec. 24. The Eregli mill of Erdemir Group, Turkey’s largest integrated steelmaker, also cut its DKP domestic scrap price to Lira 5,835/mt ($493/mt), while its extra-grade scrap buying price declined to Lira 5,830 ($492/mt), according to the mill’s updated domestic scrap buying price lists seen by S&P Global Platts.

Turkish mills use 30 million mt of steel scrap per year and have been procuring about a quarter of it from the domestic market.

— Cenk Can