NEW YORK Export prices for containerized ferrous scrap on the West Coast are under pressure after peaking earlier in the past week.
Export prices enjoyed an uptick over the past few weeks due to a surge in demand from buyers in China and Taiwan who were looking to fill inventories ahead of a seasonal slowdown due to the Chinese New Year holiday in February.
Market participants said prices peaked at $402 per tonne c.f.r. Taiwan for an 80/20 mix of No. 1 and No. 2 heavy melt before shedding $5 on Jan. 17 to a range of $390 to $395 per tonne.
Sources said Jan. 18 that prices remained under pressure, with some reporting a bid and offer range of $380 to $385 per tonne while others insisted that transacted prices were still between $390 and $395 per tonne.
One large-volume exporter said quoted prices had dropped to a range of $380 to $385 per tonne on Jan. 18 after trekking $10 higher the previous day. The source said rebar prices in Taiwan could not withstand such high scrap prices, and suggested that following the rapid decline in export prices the market would find a level in the new price range.
A second exporter said he heard that prices had dropped $10 overnight to a range of $380 to $385 per tonne c.f.r. Taiwan. "I expect prices to fall more because of the Chinese New Year in early February. Scrap inflows are still tight but improving a little," he said.
Other sources, however, insisted export tags had fallen to a range of $390 to $395 per tonne in the past week, not lower, as some sources suggested.
"The last actual sales were in the $390 to $395 range. New offers are closer to $390, although no sales were made," a third source said. "Mills are trying to bring the market down by waiting to buy, although rebar sales did drop $10 per tonne."
Large- and small-volume exporters often transact at different price levels, creating a broad range, he said, with large-volume exporters typically at the high end of the trading range.
A buyer for a Taiwanese producer said transacted prices had dropped from peaks of $400 per tonne to a range of $390 to $395 per tonne, prompted by a decline in iron ore prices to $145 per tonne.
"Some of the decline could be attributed to the Chinese New Year slowdown, but I believe a lot of it is due to trading houses releasing large amounts of their bought positions," a fifth source said. "I would say prices are more in the $390-to-$395 range."
A sixth source said the price declines came as no surprise to him. "I dont see why scrap prices are as high as they are. ... Wheres the support on new steel prices? I dont see enough demand for new steel to justify any scrap price increases," he said.