NEW YORK North American
bulk ferrous scrap export prices nose-dived over the past week
after a few sales from the East Coast to Turkey were
concluded at significantly lower levels.
U.S. East Coast exporters
stepped away from the market Monday after a bulk sale from
Canada was concluded at about $10 per tonne below U.S. offers
and expectations, market participants said.
Sources said the Canadian
exporter sold a large bulk vessel of No. 1 heavy melt, shredded
and bonus scrap at a composite price of $380 per tonne c.f.r.
Reports of the Canadian sale
came shortly after sources reported that a U.S. exporter had
booked a bulk sale to Turkey to $392 per tonne c.f.r. Turkey
for an 80/20 mix of No. 1 and No. 2 heavy melt scrap. The cargo
will also reportedly carry shredded scrap, sold at $397 per
tonne, sources said.
Early last week, sources said an
irregular exporter of bulk scrap to Turkey concluded a smaller
30,000-tonne sale at $395 per tonne c.f.r. for HMS 1&2
(80:20), $400 per tonne for shredded and $405 per tonne for
bonus scrap (
amm.com, Nov. 28).
The rapid decline in sales
prices to Turkey from the East Coast has forced several U.S.
exporters to withdraw from the market, sources said.
"The Canadian sale surprised
everyone. Suddenly suppliers have backed out and closed their
books for December. They were still in the $390 range for heavy
melt. But the Canadian sale is a big drop. If people were
thinking twice to sell at $390, people will completely back out
at the new level," one source said.
"I was in talks with two
suppliers who were looking at exporting to Turkey. After the
Canadian sale, we wished each other merry Christmas and said
wed talk in the new year," a second source said.
U.S. sources are now speculating
that exporters will move the scrap into the domestic market,
likely causing some weakness in domestic tags for December. The
U.S. market for December is expected to trade this week.
Last weeks bulk sales
caused a considerable drop in AMMs East Coast
Ferrous Scrap Export
Index, which settled Monday at $364.92 per tonne for HMS
1&2 (80:20) f.o.b. New York, down 4.7 percent from $382.77
per tonne previously.
"Turkish mills are still
suffering from lack of demand on the finished steel, which is
keeping them away from the scrap market despite (the fact that)
they need scrap for January shipment. They also see there is
plenty of scrap available in the market, therefore preferring
to wait in order to put more pressure on scrap prices," a third
source said. "But unless they do not consider cutting
production, they have to step in and start booking January
shipment cargoes sooner or later, which I think will balance
the supply and demand during December."
On the West Coast, two confirmed
bulk cargo sales to Taiwan moved AMMs West Coast
Ferrous Scrap Export
Index for HMS 1&2 (80:20) up just 88 cents to $364.50
per tonne f.o.b. Los Angeles vs. $363.62 previously.
West Coast sources said two
cargoes of HMS 1&2 (80:20) were sold by different exporters
to different mills in Taiwan at $400 and $402 per tonne c.f.r.,
respectively. The sales were completed about 12 days ago but
were only confirmed this past week.