Taiwan's scrap imports rebound in January

Taiwan's ferrous scrap imports in January rebounded from a low year-on-year base to increase by nearly 30pc against the previous year on rising demand, as seaborne scrap prices bottomed out in late October.

Scrap imports were 278,214t in January, up by 13.8pc from the previous month and up by 28.3pc against a year earlier, customs data show.

The higher scrap imports were attributed to relatively low seaborne scrap prices in late October that picked up in early November, said market participants. The imported scrap price hit a five-month low of $530/t on 25 October 2023 and was last at parity on 12 May 2023. The loading and lead time for HMS 1/2 80:20 scrap from the US west coast take about 8-10 weeks typically, which meant that scrap arrivals in January were booked across October-November.

Rising scrap prices from 1 November may have also spurred more buying interest, participants said.

"When prices are falling, not many buyers will bid because they believe prices will fall more," a trader said. "But when prices start rising, that's when the buying interest builds up because nobody wants to be caught securing scrap at peak prices."

Buyers may also have wanted to restock their scrap inventories ahead of Taiwan's week-long lunar new year holiday over 8-14 February.

The US remained the top supplier of ferrous scrap to Taiwan in January, supplying 120,483t. This was a 33.4pc rise from December and a 35.5pc increase from a year earlier.

Imports from Japan also rebounded from a low 2023 base to 61,884t in January, a 45.6pc increase from a year earlier. But this was down by 19.4pc from December because of the impact of the strengthening of the yen against the US dollar. The yen was ¥146.82 to the dollar on 1 December but firmed to ¥141.02 on 30 December. The lead time for Japanese scrap flows to Taiwan is typically less than a month.

Other major exporters of ferrous scrap to Taiwan include Australia and the Dominican Republic, which accounted for 11,987t and 16,395t respectively in January, or 4.3pc and 5.9pc of its net scrap imports for the month.

A firmer domestic market may also lift Taiwan's broader steel and scrap sector. The index for the domestic property sector saw a third consecutive monthly gain in January and rose by 0.65 points from a month earlier to 106.49, the Taiwan Institute of Economic Research said on 26 February. The positive sentiment in the housing market was influenced by a recovery in the domestic economy and the stable performance of the stock market, it added.