Market participants noted a weakening Taiwanese steel demand since the start of the year, with uncertainty prevailing post-Chinese New Year among scrap buyers.
The marginally higher spot scrap prices observed in January dampened buying interest, with the spot price for HMS 1/2 80:20 containerized scrap from the US west coast reaching USD 380/t on January 17 and settling at USD 375/t CFR by month-end.
The increased spot prices prompted a cautious approach from steel mills and scrap buyers, leading to a wait-and-see attitude. Typically, containerized scrap bookings involve an 8-10 week period between agreement and delivery.
Import volumes for the second quarter of 2024 are anticipated to remain stable or decrease slightly due to seasonal factors, with production expected to decline during the summer months due to electricity restrictions imposed by local authorities.
April's rise in electricity rates is projected to limit any potential increase in imported scrap prices and volumes. Mills may also reduce output by 20-40% to manage their electricity consumption.
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