Posted on 05 Nov 2019
Local demand for scrap in the US has failed to pick up. However, stronger scrap prices, especially in the south and southeast, due to higher export prices are expected to lift transactions for November, which are anticipated to be settled soon.
Demand in the US Midwest remains weak due to continued mill outages through December. Market players say that flow into yards has decreased by -30-50% as a result of low pricing.
The expectation for November pricing is for an increase of $10-30/tonne depending on the region, with higher increases anticipated in the east and lower in the Midwest. Many market players think the market may increase by $40/t within the next 30-60 days and $50-60/t within 60-90 days. However, these rates will depend on weather conditions, mill outages and finished steel demand and prices in the US domestic market.
“Export prices have risen more than $30/t in the last 30 days,” says a scrap supplier in the south. “We have a huge spread between eastern and Midwest pricing. It should not be that high.”
On the West Coast, increased export prices have begun to face resistance in Asian countries. In the Taiwan market, where price offers are at higher levels, it is observed that Taiwanese mills are not bullish on scrap prices any more.
A Taiwanese buyer tells Kallanish: “Our inventories are at healthy levels and we find the current levels of scrap too high, not affordable for us. We cannot understand how Turkey continues raising imported scrap prices. Finished steel prices are not increasing in line with scrap prices. We will most likely see a correction when Turks lower their demand.”
On the East Coast, US suppliers are heard to have offered $260/t cfr and above for HMS I/II 80:20 to their largest export market, Turkey. In the most recent US-origin deal concluded by a Turkish mill, prices stood at $258.5/t cfr for HMS I/II 80:20, $263.5/t for shredded and $268.5/t for bonus grade.
