NEW YORK Weaker ferrous scrap tags and offers to Turkey and India have encouraged some East Coast exporters to drop buying prices at their yards, according to market participants, with others poised to follow.
Some exporters began lowering buying prices after both the bulk and containerized scrap export markets softened this past week.
Exports of containerized scrap ground to a halt after Indian buyers dropped their bids by up to $25 per tonne (amm.com, Nov. 27). A day later, a bulk sale to Turkey was concluded at about $395 per tonne for an 80/20 mix of No. 1 and No. 2 heavy melt, a $12-per-tonne drop from mid-November prices (amm.com, Nov. 28).
By late Thursday, several domestic suppliers of heavy melt to East Coast export yards from New England to the Southeast said exporters had dropped buying prices by up to $20 per ton at some locations. Other yards are largely expected to follow in coming days.
Most sources said exporters have lowered No. 1 heavy melt buying prices to anywhere between $310 and $330 per ton, depending on local or remote shipment and the location of the export yard.
"I was quoted $310 per gross ton for No. 1 heavy melt. The reason given was that there were no sales looking forward," said one source who supplies yards in New Jersey and Philadelphia.
A second source who supplies the same region said he had received an offer of $325 per ton. "Some are a little higher to fill old orders," he said.
A third Mid-Atlantic source confirmed the downward price trend. "The export yards are trying to push prices down due to Turkey buying scrap out of Europe. They dropped $10 to $20 per ton," he said.
In New England, sources said buying prices at some export yards in Boston and Portsmouth, N.H., were slashed by between $10 and $12 per ton.
"The prices have dropped about $10. The overseas market is weakening but I think this $10 drop might be the end of it for the rest of the year," a New England-based source said.
Two other sources in the region, however, said they had yet to hear of any price drops.
"They have not dropped us yet," said one New England supplier. "I have heard that the market will be sideways for December. "If anything, it could go down maybe $10 to $20 per ton. I think there is an abundance of material right now, but I think it will be short-lived and prices will continue to creep up into next year."
Sources said that Southeast yards also had dropped prices, although one denied the talk, contenting that export yard buying prices at ports in Georgia and Florida remained unchanged this past week.
"We have not seen any price drops in the Southeast at this time," he said. "Some buyers are beginning to tell suppliers that prices may be down in December due to weaker export prices."
The recent weakness in export yard pricing may be temporary, one broker said, calling on suppliers to stay bullish.
"Prices may have dropped but there are still buyers. We believe the $410-per-tonne delivered Turkey sale will still happen. (Exporters) are using the small pieces of information out there about some stagnation to parley that into a $5 trade advantage," he said. "Bottom line: stick to your knitting. Demand is still alive and well, even though there has been a pause. Turkey and the domestic U.S. mills will need scrap come January. Guys will not sell many tons and they will be rewarded for it."