NEW YORK Ferrous scrap export prices on the West Coast have dropped $10 per tonne this week after two bulk cargoes were sold to China on Monday at a discount to the previous weeks range.
A large Chinese consumer confirmed reports by a number of West Coast exporters that two 30,000-tonne cargoes sold at $465 per tonne c.f.r. for shredded steel scrap and $460 per tonne c.f.r. for an 80/20 mix of No. 1 and No. 2 heavy melting scrap. The sale was $10 per tonne lower than last weeks bulk shipment of shredded scrap to Taiwan, which reportedly sold at $475 per tonne (AMM, April 10).
Market participants said the sale has triggered a wave of offers from other West Coast bulk exporters, but no further transactions were confirmed.
"Two bulk cargoes sold down $10 to China at $465 per tonne c.f.r. for shred and $460 per tonne c.f.r. for 80/20 heavy melt," said one exporter. "Five more bulk cargoes are now being offered off the West Coast at the same price."
The sale marks the Chinese consumers first purchase in the U.S. scrap market since February, a source at the company said. That month, the consumer picked up several U.S. cargoes at a high price of $470 per tonne c.f.r. for 80/20 heavy melt.
A second exporter, who had heard talk of the sale, said he wouldnt be surprised to see other exporters jump on board the new price level.
"When somebody breaks the market, everybody chases it. So the other exporters will have to trade at that level," he said.
But another source in China said other steel mill and traders are largely expected to stay on the sidelines until prices fall to the more attractive $450-per-tonne mark.
Meanwhile, a source at a South Korean consumer said he had received several offers from three West Coast bulk exporters in recent days.
"Two exporters offered prices higher than a third exporter. The offer levels are between $465 and $470 per tonne for shred," he said.
At the same time, the consumer said the market expects bulk freight to China, South Korea and Taiwan to drop $2, to $33 per tonne, later this week or early next week.
"Bulk freights have been at $35 per tonne for a long while. This week Im hearing they could drop to $33 per tonne, so that will give the exporters some relief in this weakening market," he said.