Quarterly Report – September/October 2020

Domestic ferrous scrap prices increased consistently throughout the months of July and August as finished steel demand improved, attributable to seasonal construction projects along with support from stronger international steel and scrap markets. Compared to May and June trade numbers, Japanese scrap suppliers shifted approximately 28% of supply away from Taiwan in July and August, choosing instead to increase shipments to the domestic, South Korean and Vietnamese markets as steelworks reopened and looked to restock scrap inventories. Conversely, for the months of July and August, US ferrous scrap exports to Taiwan improved approximately 20% compared to May and June, with the USA gaining more traction on domestic scrap collection.

While steel and scrap prices in Taiwan are trending lower at the time of writing as market participants await more direction going into October, expectations for the fourth quarter remain positive once seasonal electricity restrictions are lifted and production schedules normalize.

Bright spots in the Taiwanese economy have been improved PMI and export order results, both reflecting the improved state of the country. In August, the PMI surged to 56 from 50.5 in July - the highest result for the year to date - while export orders increased over 13% for the same period. The expansion is mostly from manufacturing of telecommuting products as many workers globally shift from an office to a home setting. The enhanced state of the economy has prompted the Taiwanese central bank to revise growth expectations for the final quarter of the year to 1.6%, making it an outlier among many other developed economies.

Autumn Barnes - Autumn Barnes (Taiwan)

Autumn Barnes

Sims Metal Management Global Trade Corporation (USA), General Delegate & Board Member of the BIR Ferrous Division

Quarterly Report – September/October 2020