Japan’s scrap export tender slips in June
The monthly export tender of Japanese scrap dealer co-operative Kanto Tetsugen for June settled lower compared with May but remained above recent market levels, providing support to the export market and prices.
The June tender concluded at an average of ¥51,364/t ($327.20/t) fas for 25,000t of H2 scrap, a fall of ¥1,226/t from May. This brought the fob price to an equivalent of ¥52,364/t or $333.60/t. The first 10,000t settled at ¥51,510/t with the second 15,000t at ¥51,267/t. The two shipments are expected to head for Vietnam and Bangladesh.
Several market participants expect the export market to be supported, despite the tender result concluding lower against May, as it was above recently traded levels. The export market has faced significant downwards pressure over the past month, with the H2 fob price falling by ¥2,400/t because of sluggish demand and low price expectations from Taiwanese and Vietnamese buyers.
The Argus H2 fob Japan assessment was ¥50,200/t on 12 June, while the May monthly average was ¥51,381/t fob Japan.
The latest tender price aligns with the domestic price in the Kanto region, which may become the new target price for exporters. The H2 collection price at Tokyo Steel's Utsunomiya plant was ¥51,500/t delivered to the steel mill.
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Taiwan’s imported scrap prices hit 21-month low
Taiwan’s imported scrap prices hit 21-month low
Singapore, 22 August (Argus) — Taiwan's imported containerised scrap prices fell to a 21-month low on 21 August, driven by sluggish domestic steel demand and a surge in cheaper billet offers from China. The daily containerised HMS 1/2 80:20 cfr Taiwan imported scrap price fell by 4pc on the day to $325/t on 21 August. The price, which has been declining steadily since the second quarter of 2024, was down by 5.8pc from $345/t on 1 August, Argus data show. The price was last lower in November 2022 at $323/t, the data show. Taiwan's imported scrap market has been under pressure since the start of April owing to a seasonal slowdown, with steel mills entering the energy conservation period, which typically lasts from May through September or October, depending on local authority regulations. During this period, electricity prices are relatively raised, with industrial users facing hikes of up to 15-25pc, depending on their consumption levels. To manage the rising costs, many steel mills reduce their shift work, cut production during peak energy demand, or shift operations to off-peak hours, leading to a drop in steel output. Trade sources estimate that the lower output could be in the range of 10-30pc island-wide. But prices failed to rise despite these operational adjustments, as steel demand was affected by adverse weather conditions disrupting construction activities, particularly in July. Market sources told Argus that prominent steelmakers have sought to lower local rebar prices to entice buyers' interest, but downstream steel buyers remain passive and convinced of even lower prices in the near term. The drop in scrap prices was also exacerbated by an influx of cheap billet offers from China, as well as other regions like Russia, South Korea, Indonesia, and Japan. This weighed heavily on scrap procurement efforts, benefitting steel re-rollers on the island. Market sources told Argus that the price of vanadium-added billets, which stood at approximately $515-525/t over May-June, fell to around $475-485/t by mid-August. They added that factoring in a $180-200/t operating cost to manufacture billet from scrap, scrap buyers and mills estimate scrap imports should be below $300/t to remain competitive. But some steel mills remain cautiously optimistic despite such challenges and pointed to some supportive factors that prevented scrap prices from hitting rock bottom. "The global economy is steadily recovering … Taiwan's car sales are steady, and the demand for factories, offices, and residential construction is rising, leading to an increase in the demand for steel related to cars, home appliances, and constructions," Taiwan's largest state-owned steel manufacturer noted in a preliminary report released in late July. Scrap suppliers to Taiwan also maintain a positive outlook, citing sustained demand for housing despite the government's cooling measures, such as lowering the loan-to-value ratio for second-home purchases from 70pc to 60pc. A scrap buyer said that interest rates for housing have stayed relatively low, making financing for real estate more accessible. But there are concerns that potential rate hikes could slow the market, especially for buyers heavily reliant on mortgages. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Work stoppage begins at Canadian railroads
Work stoppage begins at Canadian railroads
Washington, 22 August (Argus) — Operations at Canada's two largest railroads ended Thursday morning at 12:01am ET as a work stoppage began following the failure of labor contract talks. Canadian Pacific Kansas City (CPKC) and Canadian National (CN) locked out union members, while the Teamsters Canada Rail Conference (TCRC) launched a strike at CPKC. The union has not yet issued a strike notice to CN , but its workers are barred from the property. The work stoppage freezes ongoing train shipments even if they have not reached their destinations. The railroads last week stopped loading railcars with shipments of certain toxic and poisonous materials to keep products from being abandoned in unsafe locations, and this week stopped loading all commodities and other freight within Canada. Operations along CN and CPKC's US lines continue but trains cannot cross into Canada. The union confirmed just after midnight that work stoppages at CN and CPKC had begun. Most Teamsters members stopped work at 12:01am ET, though rail traffic controllers at CPKC will keep working until 2:01am ET. CPKC and CN announced they had formally locked out employees represented by the Teamsters union. CN said the union did not respond to an offer it had made in a last attempt to avoid the strike. Wide range of commodities in crosshairs The work stoppage will affect freight deliveries for a variety of goods across North America, including shipments of propane to rural communities, grain and coal deliveries to Canadian export terminals, and chemical inputs to manufacturing facilities. CN said Wednesday that grain prices were already being affected and that sawmills in British Colombia were cutting shifts. Coal exports from Canadian mines would be held because those operations are only served by CN and CPKC. But western US coal exports are not expected to see much of a disruption since US carrier BNSF has rail lines going directly to Westshore Terminals near Vancouver. BNSF will not be able to interchange railcars with CN and CPKC in Canada, however. Crude markets are also not expected to see significant disruption from a strike in the short term because of pending maintenance at upstream oil sands facilities and spare pipeline capacity. Prices for Canadian propane and butane — which rely heavily on rail to move product from an oversupplied market to the US — fell Wednesday ahead of the strike. Wide gap between workers, railroads The railroads and the Teamsters remain far apart on contract terms. The union — which represents roughly 9,300 train operators and support staff at CN and CPKC and 85 rail traffic controllers at CPKC — said forced relocation and scheduling and fatigue management that will lead to safety risks are the key points of dispute. CN said its offers, which have been turned down repeatedly, would have improved safety, increased wages, and provided employees with better schedules. CPKC chief executive Keith Creel on 19 August claimed union leadership had made "wildly inaccurate characterizations" about the railroad's proposals in order to "create a false public narrative" about negotiations. He said the railroad did not unilaterally change or cancel the terms of the most recent collective agreement or make proposals that compromise safety. Creel said most recently CPKC has focused on a status quo-style contract renewal with a duration of three years. That proposal would have no work rule changes and the railroad only wanted to negotiate "reasonable adjustments" to the timing of held-away pay to address regulatory changes made by Transport Canada last year. CN called on Canadian minister of labour Steven MacKinnon to intervene this week. He has already been meeting with each railroad and the Teamsters. CPKC this week reiterated earlier calls for binding arbitration, but MacKinnon rejected that request on 15 August. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Canadian rail labor talks continue as deadline nears
Canadian rail labor talks continue as deadline nears
Cheyenne, 21 August (Argus) — Canadian railroads and a major labor union are still in discussions in the final hours before workers could go on strike. Contract negotiations between Canadian Pacific Kansas City (CPKC), Canadian National (CN) and Teamsters Canada Rail Conference (TCRC) continued today, CPKC said. If there is no agreement tonight, the union at 12:01am ET Thursday could begin a strike against CPKC and each railroad could begin a lockout of workers. The Teamsters did not issue a required strike notice to CN, but a lockout would still shut its network down. Railroad customers and Canadian authorities are increasingly frustrated by the lack of agreement on new labor contracts. Teamsters members have been working under the terms of contracts that expired in December 2023. Canadian prime minister Justin Trudeau today urged the railroads and union to resolve the situation and avert a strike. "It is in the best interest of both sides to continue doing the hard work at the table to find a negotiated resolution," Trudeau said. "Millions of Canadians, of workers, of farmers, of businesses, right across the country are counting on both sides to do the work and get to a resolution." Canadian minister of labour Steven MacKinnon yesterday said he met with Ontario's labour minister and would be meeting with each railroad and Teamsters officials in Montreal and Calgary "to deliver our shared message: Get a deal at the table. Workers, farmers, businesses and all Canadians are counting on it." Union members have voted twice to authorize a strike, and each railroad has indicated it will lock out union members at the same time. The latest indication is the strike could happen as early as Thursday 22 August. "CPKC remains focused on and committed to arriving at a negotiated outcome that is in the best interests of all our railroaders and their families," CPKC said today. "We are firmly committed to staying at the bargaining table to reach renewed agreements." The Teamsters and CN did not respond to requests for comment. Last week, the railroads initiated embargoes on shipments of toxic inhalation hazards (TIH) and poisonous inhalation hazards (PIH) materials. Those products include chlorine, ammonia, ethylene and phosgene, as well as rail security-sensitive materials such as explosives. Each carrier has now stopped loading trains in Canada and are focused on delivering existing shipments. Railroads also have stopped shipping trains across the US and Canada border, suspending the movement of multiple products. US rail regulators are actively monitoring the situation, concerned about how a rail labor strike in Canada would affect the US rail network and supply chain. The US Surface Transportation Board said Wednesday it is monitoring the implementation and effects of those embargoes on the network. A number of US railroads last week either implemented their own embargoes or said they will comply with the Canadian embargoes. Western US coal exports are not expected to have much of a disruption if there is a strike since US carrier BNSF has rail lines going directly to Westshore Terminals near Vancouver. But BNSF will not be able to interchange railcars with CN and CPKC in Canada. Crude markets are also not expected to see significant disruption from a strike in the short term because of pending maintenance at upstream oil sands facilities and spare pipeline capacity. Prices for Canadian propane and butane — which rely heavily on rail to move product from an oversupplied market to the US — fell Wednesday ahead of the strike . By Courtney Schlisserman and Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Chile more reliant on imports on steelmaker suspension
Chile more reliant on imports on steelmaker suspension
Sao Paulo, 20 August (Argus) — Chile will soon find itself more reliant on steel imports after a key mill announced suspension of operations as it faces heightened competition from cheaper imported steel. Chilean steel mill Siderurgica Huachipato (CSH), whose production of long steel supplied the country's construction sector, earlier this month said it would shutter its steelmaking operations by September, saying it is not able to financially operate in Chile anymore. Huachipato said that imported steel was posing a challenge to the company's financial recovery. The company did not give a timeframe for operations to resume. Now, the fate of Huachipato — and Chile's steel-consuming sectors — is in the hands of imported steel, as the country is one of the continent's largest steel consumers, but lacks sufficient local production. Supply, demand gap plugged by imports Chile is South America's largest consumer of steel on a per capita basis, consuming 112kg/metric tonne (t) of rolled steel per capita in 2023, compared with the 107kg/t per capita consumed by Brazil, according to data from Latin American steel association Alacero. But Chile produced only 1.2mn metric tonnes (t) of steel in 2023, over 26 times less than the 32mn t Brazil produced in the same period. Chile imported 1.6mn t of iron and steel in 2023, according to data compiled by Global Trade Tracker. Of those, 63c came from China, 14pc from Japan and 7.6pc from South Korea. Import ratios remained similar over the first half this year, with China supplying almost 62pc of all Chilean steel imports, while Turkey stood as the third largest steel supplier to Chile, with a 5pc stake, behind Japan's 14.4pc. Chile, which was already reliant on imports, is now set to increase its demand for overseas material. Sourcing strategies Chilean steel association ICHA said that products such as flat steel for structural use would be supplied by imports, but added that consumers must verify the quality of steel to comply with Chilean standards and regulations. The steel will chiefly come from China, a source who trades steel to the country said, as most Latin American products are still more expensive than the Asian material. Chile could have part of its demand supplied by local steelmaker AZA, another source told Argus , as the Chilean mill has secured an important stake in the country's steel sector over the years. But it is unlikely that the company could compete with lower prices of the imported material, the source added, citing that Turkey has been able to penetrate the Chilean market over the years by complying with the country's strict regulations. Imports will not be under threat of higher tariffs like other Latin American countries, which in recent months have imposed further tariffs on Asian steel. Chile's own recently-imposed duties on Chinese steel balls and bars will only last six months. Brazil could be another source for the Chilean market, Alacero told Argus . Brazil, which represents a 4pc share of Chilean steel imports, would also face the challenges of competing with China, Alacero said. By Carolina Pulice Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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