US Ferrous scrap export market evens out

By Paul Ploumis (ScrapMonster Author)
October 28, 2015 09:16:51 AM
The US ferrous scrap export market have given early signs of bottoming out, says industry sources. However, participants are seen divided over future price movements.US Ferrous scrap export market evens out
SPOKANE (Scrap Monster): The US Ferrous scrap export market that had been in a prolonged downtrend since August has finally given signs of bottoming out. The export prices are likely to stabilize going forward, as global trade data indicates scrap bookings by Turkish mills at higher prices. Also, industry participants are seen divided on the future price movements in scrap exports from the country.

According to export sources, a Turkish producer imported 25,000 tonnes of HMS 80/20 ferrous scrap at $171.50 per tonne CFR Turkey and 5,000 tonnes of plate and structural scrap at $184 per tonne from a German exporter. Also, 23,000 tonnes of 80:20 Heavy Melting Scrap was imported by the same producer at a price of $175 per tonne CFR from Europe. The producer also imported 18,000 tonnes of shredded scrap at $180 per tonne CFR Turkey from the same European supplier.

Incidentally, Turkish producers were forced to import at higher prices owing to depleted inventory levels. The imports had been on hold for a long time, as Turkish producers were seen waiting for scrap prices to slide to $150 per tonne levels. On the other hand, a Turkish producer had reported imports of 80/20 HMS scrap from Baltic region at a lower price of $167 per tonne CFR during last week.

No exports were recorded from the US during the past week. US exporters were seen holding back, expecting further recovery in prices.

The prices of Chinese and Russian steel billet have remained unchanged at around $250 per tonne FOB. Availability of scrap at around $170 per tonne has made it profitable for mills to use scrap in place of billets. However, industry experts remain divided on whether an actual bottom has been made. According to them, it requires more time to confirm that scrap export prices have leveled out.

Sources indicate that domestic scrap market in the US is currently passing through a period of fine-tuning. The surplus in scrap supply has eased off. Going forward, domestic scrap market is likely to witness tight balance between supply and demand. This should take the prices further higher from current levels.