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Brighter prospects as freight rates pick up

Markets were rattled by Turkey’s military engagement in Syria but that wasn’t enough to deny higher cargo prices

Turkey continues to lead the global markets, with a change in direction seen in October across the major trading markets resulting in higher prices and a pick-up in trading activity. Prices into Turkey dipped a further US$ 10 per tonne towards the end of September with a lack of optimism on the global markets, with several US cargoes booking HMS I/II 80/20 for US$ 233 per tonne, and then US$ 228 per tonne as the month came to a close.

A UK cargo of HMS I/II 80/20 reached US$ 220, which compares with US$ 228 per tonne reported in the previous issue, while several Baltic cargoes were in the range of US$ 220 – 223 per tonne for the same grade of material, all on a cfr basis.

As October began, several cargoes were booked for US and Baltic origin and all at US$ 226 per tonne. Fortunes changed that month with prices consistently increasing on a weekly basis with cargoes at the start of the month ranging from US$ 223 for UK HMS I/II 80/20, US$ 233 per tonne for US HMS I/II 80/20 and US$ 234 per tonne for Baltic HMS I/II 80/20, again all on a cfr basis.

Military action between Turkey and Syria spooked the markets, as did the resulting political spat between the US and Turkey which brought trading to a standstill mid-month on fears of a 50% tariff being repeated. But this was short lived and cargo purchases resumed with a Baltic cargo trading at US$ 242 per tonne and one from the UK at US$ 245 per tonne.

The market dipped towards the end of October with a brief pause in trading due to a public holiday in Turkey before it resumed once more, closing the month for HMS I/II 80/20 from the UK at US$ 240 per tonne, European HMS I/II 80/20 at US$ 238 per tonne, Baltic cargoes at US$ 241 – 243 per tonne and US HMS I/II 80/20 at US$ 244 per tonne.

Gains continued into November and, at the time of writing, cargoes from US and Baltic sources had secured HMS I/II 80/20 at around US$ 258 per tonne.

India and Taiwan

The India scrap market continued its losing streak at the end of September with HMS I/II 80/20 at US$ 235 – 250 per tonne and this continued into October, with reported cargoes of US$ 230 – 245 per tonne. More material was booked both before and after the Diwali festival with prices moving to US$ 235 – 255 to reflect this pick-up in demand as the month ended. They increased to US$ 240 – 260 per tonne at the beginning of November with all eyes on Turkey.

In Taiwan, prices moved down throughout September following a lack of interest for material, closing the month at US$ 230, and entering October at the US$ 220 level, although they gained ground before the close of the month, reaching US$ 235 following a lack of available material, and rising in early November past US$ 240 per tonne.

Competing commodities

China’s iron ore imports rose in September for the third consecutive month to 99.36 million tonnes. That was up from 94.85 million tonnes in August, a 4.8% increase month-on-month and a 20-month high due to solid demand and consistent shipments.

Prices towards the end of September reached US$ 94 per tonne due to potential steelmaking restrictions in China rattling the market temporarily. Prices moved up and remained steady into October at US$ 93 per tonne because of a week-long public holiday in China.

Prices dipped below US$ 90 per tonne in the middle of month, following a change in market mood with growing inventories from the biggest iron ore supplying countries adding to market woes. Prices fell to US$ 87 per tonne and ended the month further down at US$ 85 per tonne as demand dipped. At the beginning of November prices had relaxed further and, at the time of writing, prices had reached US$ 83 per tonne due to uncertainty over the upcoming winter months.

This article is a preview of the latest market report by Recycling International.

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