Taiwanese scrap prices have fallen again this week due to sluggish demand. In addition to the reduction in demand, which was due to power cuts in the summer, the overhauls of production lines by local steel mills have further hit scrap purchases.

Kallanish assessed HMS 1&2 80:20 container scrap on Wednesday at $445/tonne cfr Taiwan, down by $10/t week-on-week.

Scrap import business saw another decline in activity this week, and Taiwan's steel mills continued to suppress purchasing due to sufficient scrap stocks and equipment overhauls. The number of import offers also decreased, and import traders lost confidence and then lowered their offer prices. 

HMS 1&2 80:20 container scrap from the US West Coast was offered at $450/t cfr Taiwan, down by $5/t from last week. Buyers’ bids were even lower, at about $440-445/t cfr Taiwan, but the two sides struggled to reach deals. Japanese H2 50:50 offer prices also decreased to $477/t cfr Taiwan, less competitiveness than US scrap. Shipping is still tight and costs have fluctuated greatly, resulting in steel mills' conservative attitude towards import transactions.

Major Taiwanese electric arc furnace mill Feng Hsin Iron & Steel has this week kept its rebar sales prices stable but cut scrap purchasing prices by TWD 300/t. Its purchase price for HMS1 is now at TWD 11,400/t ($407/t) and the list price for #5 (5/8 inches or 15.875mm nominal diameter base) rebar is at TWD 23,200/t ex-works.

Market participants expect steelmaking activity in September will return to normal levels, meaning steel mills will purchase large quantities of scrap in August. Rising Covid-19 infections in Asia have hit scrap demand and prices, with the decline in prices gradually coming in line with the expectations of Taiwanese steel mills, sources observe.