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Mixed sentiments hit container export market

Keywords: Tags  ferrous scrap exports, India, Taiwan, China, South Korea, scrap, ferrous scrap, exports Sean Davidson

NEW YORK — Mixed sentiments have crept into the ferrous scrap export market as East Coast shippers of containerized scrap to India wrestle to make sense of contrasting reports.

A number of market participants in the United States, Europe and India reported sales of containerized shredded scrap this past week at prices anywhere between $430 and $443 per tonne c.f.r. Nhava Sheva. For most, these prices were unchanged from the previous week’s levels.

However, some exporters denied reports of sales on the higher end of that range, insisting that no sales were completed above $435 per tonne.

"Sentiment has soured in India, as expected. It is a buyer’s market now," said one source, claiming that sales of container shred to India were between $430 and $435 per tonne c.f.r. Nhava Sheva this past week.

"Market sentiment for September is weak," agreed Mumbai source. "Prices will likely correct, and I don’t think U.S. prices will hold. I think a drop-off around $10 to $20 per tonne is likely."

Another exporter to India said that a drop in production due to power cuts has made buyers at Indian mills nervous. "Therefore, we are seeing people in India trying to renege their contracts," the exporter said.

However, a fourth source offered a different perspective, citing recent strength in the Indian market from his vantage point.

"(The) Indian market has seen some positive developments this week. (The) price for ship-breaking scrap has gone up by $25 per tonne," he said. "I heard that a U.S. supplier offered 25,000 tonnes (of) shred and 15,000 tonnes of an 80/20 mix of No. 1 and No. 2 heavy melt at $445 per tonne c.f.r. West Coast India. There were no takers at these levels (but) in general, there is hope that (the) market should improve."

Another source suggested that U.S. East Coast docks had dropped f.a.s. prices by $10 to a range of $375 to $380 from between $385 and $390 previously, but other sources contested those reports, saying that there had been no changes this past week.

"It appears September U.S. domestic is going to be weak," the first source said. "Yards are returning calls or sending signals with their intent to sell, i.e., f.a.s. is also a buyers’ market now."

But a buyer for a Mid-Atlantic steel mill that competes with exporters for scrap said it was still too early to make such a call.

"I will not be in market until after Labor Day. Docks have not lowered their prices since the beginning of month, even if they have sold at less dollars of late. So (the) market around here is in a wait-and-see mode," he said.

Meanwhile on the West Coast, some exporters of containerized scrap said that export volumes to Taiwan dropped over the past five days. Declining demand also affected prices for container HMS1&2 (80:20), which traded between $390 and $395 per tonne c.f.r. Taiwan.

"Transaction volume has decreased this week going to Taiwan, and prices are closer to $390 per tonne," said a source at a Taiwanese mill.

"At the beginning of the week, we went to $395 for two days and dropped back to $390 and then stopped buying. The mills in Taiwan are contemplating production reduction, as the finished market is still very weak," he added.

"We sold containers at $390 for September delivery, but it looks like the market is going down," agreed a second West Coast source. "Reports from local Taiwan scrapyards say the mills are refusing to take their scrap at current levels. They say the price will be down $30 per tonne within a month. We will wait and see. And in the meantime, we took orders for October at $385."

Market participants said Thailand is active at the same $390-per-tonne price level but is sourcing most of its scrap from South and Central America at the moment.

South Korea is also sourcing some scrap from the region, with AMM confirming a small-volume sale of HMS 1&2 (80:20) at $370 c.f.r. Korea for scrap shipped from Latin America.

Overall, sources said it has been a quiet week for U.S. sales.

"There were two typhoons in the Taiwan region that have curtailed export activity this week," said a third West Coast participant. "Pricing has been flat on containers, although material is still moving. The Asian rebar market is still struggling, putting a ceiling on any price momentum. The only bright spot has been an increase in scrap prices in Japan. We hope that this might be an indication of future trends, as supplies remain constricted."

This past Monday, Tokyo Steel Manufacturing Co. Ltd. raised its scrap purchase prices for the second time in less than a week for a combined increase of between 2,000 and 3,000 yen ($25 to $37) (, Aug. 20).

Meanwhile, a source in Los Angeles reported exports of auto bundles via containers to China at about $300 per tonne c.f.r.

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