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Turkish demand keeps ferrous scrap exports healthy

Keywords: Tags  ferrous scrap shipments, ferrous scrap exports, Turkey, Korea, China, AMM Staff

After record shipments last year, the U.S. ferrous scrap export market looks strong again so far in 2012, driven especially by demand from Turkey.

Turkish mills kept U.S. ferrous scrap exports chugging along into the beginning of the second quarter, ordering a number of bulk cargoes when other buyers were either scaling back, making their own normally smaller purchases or were out of the market altogether. In addition to tonnages, prices remained strong and steady.

Prices for the 80/20 mix of No. 1 and No. 2 heavy melting steel scrap remained at around $440 per tonne c.f.r. as of the end of March, two large exporters said, a level relatively unchanged from the beginning of the year. One exporter said that four of the five deep-sea vessels heading to Turkey at that time left from the East Coast, while one shipment came from the Gulf Coast.

Through March and heading into April, available government figures and AMM estimates indicated exports were higher than at the start of 2011. In addition to Turkey, South Korea, Malaysia and India helped lift volumes. The surge in demand from those four countries more than offset lower Chinese demand.

The year began strong, with overall ferrous scrap exports in January and February—the most recent official statistics available—climbing 4.6 percent to nearly 3.28 million tonnes from 3.13 million tonnes in the same period last year, according to U.S. Commerce Department figures.

Turkey maintained its position as the largest offshore buyer of U.S. ferrous scrap, taking 970,240 tonnes in the first two months of the year, a 60.2-percent jump from 605,470 tonnes a year earlier. Korea moved up to the No. 2 spot, purchasing 553,318 tonnes in January and February, a 32.2-percent increase from 418,487 tonnes a year earlier, followed by Taiwan at 483,838 tonnes, up 3.2 percent from 468,678 tonnes in the same comparison.

China finished a disappointing fourth at 362,762 tonnes, down 38.6 percent from 590,725 tonnes in the opening months of last year, and the country was expected to remain in that position for the entire first quarter.

Export sales were strong enough to keep this year on a trajectory similar to last year’s record-setting pace. That held true for many of the various grades of scrap that make up most export orders.

No. 1 and No. 2 heavy melting steel scrap exports surged to a combined 1,305,334 tonnes in January and February, up 24.8 percent from 1,046,312 tonnes in the same period last year. No. 1 heavy melt accounted for the lion’s share at 1,150,243 tonnes, climbing 21.8 percent from a year earlier. Plate and structural scrap exports of 144,180 tonnes were up 19.2 percent from 120,933 tonnes in the first two months of last year, while No. 1 and No. 2 bundles jumped 28.6 percent to 88,516 tonnes from 68,853 tonnes in the same comparison.

Defying the pattern were shredded exports, which slid 8.5 percent to 1,009,799 tonnes in January and February from 1,103,991 tonnes a year earlier, and stainless scrap, which tumbled 13.1 percent to 75,389 tonnes from 86,751 tonnes.

Looking back at 2011 provides more dramatic comparisons. U.S. ferrous scrap exports surged to nearly 24.3 million tonnes last year as demand from Turkey, China and Taiwan helped lift the market by 18.5 percent.

Three strong quarters were enough to absorb a less-robust fourth quarter, when ferrous scrap exports fell 6.2 percent to 5.4 million tonnes from nearly 5.8 million tonnes in the same 2010 period, U.S. Commerce Department data show.

Turkey remained the volume leader last year, taking more than 5.6 million tonnes from U.S. suppliers, up 29.2 percent from less than 4.4 million tonnes in 2010. Chinese demand rose 31.6 percent to 4.2 million tonnes from 3.2 million tonnes in the same comparison, and its 2011 total would have been even higher had purchases not plunged to 188,371 tonnes in December as consumers refused to accept higher U.S. prices.

Ferrous scrap sales to Taiwan jumped 25.4 percent to more than 3.5 million tonnes last year from 2.8 million tonnes in 2010, boosted by a 324,260-tonne intake in December, up 32.9 percent from the previous month. Korea slipped to fourth place in 2011, taking slightly less than 3 million tonnes from U.S. suppliers, a modest 4.8-percent increase from 2.8 million tonnes in 2010. India’s 2011 intake of 1.2 million tonnes was up 23.7 percent from the previous year, aided by a 57.4-percent jump in December to 131,406 tonnes from 83,504 tonnes in November.

Shredded steel scrap sales finished the year at nearly 8.4 million tonnes, 12.8 percent ahead of 7.4 million tonnes in 2010, after surviving a brutal December in which exports fell 31.8 percent to 546,671 tonnes from 801,838 tonnes in November. Exports of No. 1 heavy melt scrap enjoyed a bumper 2011, rising 42.7 percent to nearly 8.1 million tonnes from 5.6 million tonnes the previous year.

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