NEW YORK Export prices for containerized ferrous scrap on the West Coast have followed weaker bulk sales, dropping as much as $10 per tonne this week vs. last week.
Weaker demand from Taiwan and a large buildup in inventory by a major bulk exporter has led to the weakness, market participants said.
One day after AMM confirmed a Chinese consumer had booked two bulk cargoes at prices that were down $10 per tonne to $460 per tonne c.f.r. for an 80/20 mix of No. 1 and No. 2 heavy melting scrap (AMM, April 12), exporters of containerized scrap said their market had taken a similar hit.
Several sources said containers of No. 1 heavy melting scrap to Taiwan fell to $440 to $445 per tonne c.f.r. this week, with some mills adopting a "wait-and-see attitude."
"The market on West Coast containers is on a downwards trend. It is likely down between $8 and $10 per tonne from last weeks pricing," one exporter said.
Other exporters who confirmed the trend said imminent weakness in Taiwanese demand has allowed some mills to take a back seat this week.
"West Coast prices dropped. With Taiwan expected to lower its intake by summer, they are in no hurry to book volumes, especially if prices are weakening," a third source said.
"Going forward, a pending electricity hike and slack demand for summer months will likely cause Taiwans mills (to) operate two shifts instead of three during their summer months, and some are contemplating only one shift," a Taiwanese market participant said, adding that at least two mills in Central Taiwan have scheduled upgrades and maintenance, which is likely to cause two- to three-month shutdowns.
Also contributing to the pricing pullback is the fact that a major bulk exporter has an oversupply of material in California, sources said, noting that the inventory-heavy exporter has offered about five bulk cargoes at depressed prices this week, which in turn has put pressure on containerized tags.
"They have not been able to sell any shiploads to Asia and that is why they are full of scrap," another source said.
This weeks drop in containerized scrap prices more than negates last weeks bump, when West Coast container prices averaged $450 per tonne c.f.r. for No. 1 heavy melting scrap to Taiwan, up about $5 per tonne based on steady demand (AMM, April 10).