NEW YORK Three new bulk ferrous scrap sales to Turkey off the East Coast were concluded late last week, sending prices upward after a two-week lull.
Market participants said that the primary driver for higher prices was a strong increase in Mid-Atlantic prices due to scrap flow concerns.
Two U.S. exporters sold mixed bulk cargoes to different consumers late Friday at $405 per tonne c.i.f. Turkey for an 80/20 mix of No. 1 and No. 2 heavy melt.
One exporter sold around 27,000 tonne of HMS 1&2 (80:20), 10,000 tonnes of shred and 5,000 tonnes of plate and structural scrap at $405, $410 and $415 per tonne c.i.f., respectively, according to several market sources. The second exporter sold about 32,000 tonnes of HMS 1&2 (80:20) and 13,000 tonnes of shred at $405 and $410 per tonne c.i.f., respectively.
A little later, news broke of a third bulk sale off the East Coast by a third exporter at $416 per tonne c.i.f. Turkey for a 42,000-tonne vessel carrying only plate and structural scrap. Although large-volume shipments of plate and structural have historically commanded a $15 premium over HMS 1&2 (80:20), sources said the cargo sold at the usual $10 to $11 premium over heavy melt.
The $405-per-tonne price for HMS 1&2 (80:20) is about $11 to $12 above the last confirmed sales from the United States, although a slight reprieve in bulk freight rates allowed pre-shipping prices of scrap some additional strength.
As a result, AMMs East Coast Ferrous Scrap Export Index for HMS 1&2 (80:20) settled Monday at $382.82 per tonne f.o.b. New York, up 3.9 percent from $368.43 previously.
Late Monday, one source said that a U.S. exporter had sold an additional two cargoes at $407 per tonne for HMS 1&2 (80:20), indicating further strength in export tags.
Sources in Turkey, however, questioned how long the market can support higher tags, with one source capping the price at $410 per tonne. "Flat product prices in Turkey are on the top and expected to decrease. Local U.S. scrap consumption is weak; therefore, there will be no shortage and most of the collected cargoes will go for export," he said.
"There is a slight upward trend in finished product prices in export markets. However, raw material prices are climbing faster and as usual mills are at a loss to catch up," a second source said. "Another setback for Turkish mills was last weeks announcement from the United Arab Emirates that they will now impose a 5-percent tax on Turkish steel bar shipments. This is very bad news for Turkish mills, and it means a loss of almost 100,000 tonnes per month in export volume. We do not expect much activity in the next few days, as the domestic market is very slow and product prices are low. Demand from export markets is weak as well."
A third source noted that Turkish mills had been hit by a similar tax in Egypt, but a fourth source said that Turkeys recently approved budget for infrastructure development could have an early "psychological impact" on prices in Turkey. "Then actual demand will follow suit," he said.
On the West Coast, only one bulk ferrous scrap export sale reportedly was concluded late last week at an average price of $417 per tonne c.i.f. China for a cargo carrying two-thirds heavy melt and one-third shred.
That lone sale put AMMs West Coast Ferrous Scrap Export Index for HMS 1&2 (80:20) at $376.01 per tonne f.o.b. Los Angeles, a 3.2-percent increase from $364.50 previously.