NEW YORK U.S. West Coast bulk export prices jumped more than $11 per tonne in the past week as demand from East Asia continued to drive prices in the region.
Market participants expect more interest from buyers in China and Taiwan this week as mills look to fill inventories before the Chinese New Year holiday next month.
Sources said that a U.S. exporter had sold a bulk cargo of shred to a Chinese mill last week at $430 per tonne c.i.f. The lone West Coast sale put AMMs West Coast Ferrous Scrap Export Index at $387.77 per tonne f.o.b. Los Angeles for an 80/20 mix of No. 1 and No. 2 heavy melt, up 3.1 percent from $376.01 previously.
A mill in Taiwan reportedly booked a 20,000-tonne cargo out of Hawaii last week at $428 per tonne for HMS 1&2 (80:20).
The West Coast ferrous scrap export market strengthened over the past 10 days as the return of Chinese interest to U.S. shores buoyed prices for iron ore and some finished products (amm.com, Jan. 8).
One source predicted that U.S. exporters would be active on the West Coast but not the East Coast this week after Turkish buyers retreated following a flurry of early-month trading, a reversal of recent market trends. "(Im) not sure what the action will be this week (on the East Coast, but) the West Coast-Asia market will get a lot of attention," he said.
Market players in the United States and Turkey said there was little visibility on when high-volume trading will resume.
"My guess is that Turkey is done for the near term, and unless they are able to pick off some cheap supplies (they) will now put the brakes on in an effort to cool the market," one U.S. exporter said. "(The) domestic market is still holding firm, but (its) not sufficient to absorb export overhang. Far East Asia is relatively strong but not even close to what Turkey was paying, and that leaves East Coast suppliers with few options. At the same time, I am hearing European suppliers are pulling offers as a result of currency moves."
A source in Turkey said that Turkish interest this week would be predicated on how rebar sales materialize. "I am expecting the market to be silent (until) Thursday, and it will be focused on rebar sales," he said. "If they can sell rebar, they may start to buy scrap on Thursday. If not, the market will be silent this week."
A third source suggested that Turkish mills may return to the market sooner than expected to fill inventories. "February is not yet covered, and January barely was. I think they are just back from holidays and things might change by the middle to the end of the week," he said. "Some are of the opinion that (the) market will continue to be strong as the demand for scrap is still there. Others opinion is that the market may soften if Turkish mills are not able to sell at the new levels. I am of the opinion that we have seen pre-holiday purchases and the bulk is yet to come."
Sources said there had been no fresh U.S. sales to Turkey after the five bulk cargoes sold early last week (amm.com, Jan. 9). Those sales offered slight strength to AMMs East Coast Ferrous Scrap Export Index, which settled Monday at $384.47 per tonne f.o.b. New York for HMS 1&2 (80:20), up 0.4 percent from $382.82 previously.
This week, market participants said only one Turkish mill had booked a scrap cargo out of the Baltic region at a composite price of $410 per tonne c.i.f. for HMS 1&2 (90:10).