Key facts
- Asian ferrous scrap prices declined in the first half of July.
- Inclement weather and reduced construction activity impacted demand.
- Taiwanese steelmakers are undergoing annual summer electricity restrictions, cutting production.
- Vietnamese mills adopted a hand-to-mouth purchasing strategy for seaborne material.
- Japanese scrap prices softened, influenced by a weaker export tender and rainy season.
- Chinese domestic scrap prices showed signs of stabilising amid steel price rebounds.
Imported ferrous scrap prices across Asia continued their downward trend in the first half of July, primarily driven by adverse weather conditions that hampered construction activity and consequently reduced demand for steel and raw materials. In Taiwan, containerised heavy melt scrap (HMS) 1/2 80:20 prices fell by $10/tcfr to $325/tcfr by July 15. Local steelmakers are also managing annual summer electricity restrictions, leading to production cuts of 20-30% and further weighing on scrap demand. Despite a recent dip, domestic rebar prices in Taiwan had previously reached a two-year high of NT$18,500/t in late May, but have since fallen to NT$17,000/t.
In Vietnam, imported scrap prices saw a further decrease of $3/t to $377/tcfr for HMS 1/2 80:20, with mills adopting a cautious purchasing strategy due to sluggish demand during the monsoon season. Japanese H2 scrap also traded lower, around $362-365/tcfr. Japanese domestic scrap prices softened, mirroring a weaker July Kanto export tender which dropped by ¥1,998/t to ¥52,508/t fas. Market participants anticipate further price declines in Japan due to subdued overseas buying interest and seasonal maintenance at electric-arc furnace (EAF) mills.
Mainland China's domestic scrap prices faced pressure from weak steel demand and negative margins for some EAF mills, with the East China heavy melt scrap assessment falling by 36 yuan/t ($5.32/t) to Yn2,177/t. However, the market began showing signs of stabilisation this week as steel prices rebounded, prompting some mills to increase inventory levels.