Taiwan's ferrous scrap imports fell on a year-on-year basis in March, as a slight rise in spot prices in January combined with slow domestic steel demand to discourage purchases.

Taiwanese steel demand has weakened since the beginning of the year, market participants said. "Market fundamentals in 2023 were still okay, but slowed down in January as scrap buyers were unsure about the market post-Chinese new year," a trader explained.Marginally higher spot scrap prices in January also suppressed buying appetite. The spot price for HMS 1/2 80:20 containerised scrap from the US west coast was as high as $380/t on 17 January and was assessed at $375/t CFR by the end of that month.

The higher spot prices encouraged steel mills and scrap buyers to take a wait-and-see approach. Loadings and delivery of containerised scrap bookings are usually made 8-10 weeks after an agreement is signed.

Import volumes for the second quarter of 2024 are expected at steady-to-lower levels on seasonal weakness, market participants said. Production is likely to fall in the upcoming summer season because of electricity restrictions set by local authorities.

A rise in electricity rates in April will also cap any upside in imported scrap prices and volumes, as mills are likely to reduce output by 20-40% to curb their electricity use.