NEW YORK Prices for containerized ferrous scrap exported from the West Coast fell this past week due to a drop in demand from buyers in key consumer markets like Taiwan, South Korea and China, who continue to seek prices well below U.S. offers.
Taiwanese mill bids for containerized scrap ranged between $380 and $385 per tonne c.f.r. for an 80/20 mix of No. 1 and No. 2 heavy melt this past week, sources said, down $5 per tonne from the previous weeks range.
"West Coast markets are certainly weakening. Taiwan and Korea are skittish about jumping in," one scrap exporter said. Meanwhile, U.S. offers were at around $360 f.a.s. Long Beach, with buyers aiming lower, he said.
"Dealers are trying to resist taking any new orders, but many seem conscious that there is no real demand to substantiate these levels," he added.
Some sources said offers for bulk shipments from the West Coast stood at around $425 per tonne c.i.f. China or South Korea for HMS 1&2 (80:20) this past week, with buyer bids reportedly $15 below that level.
"The Chinese seem to be willing buyers at levels of $410 (for) heavy melt. Korea would prefer to buy at $415 and Vietnam wants to buy at the same level," a second source said. "Taiwan offers (for containerized scrap) are at $390, but buyers (are) looking for $380 to $385."
A scrap buyer for a Taiwanese steel producer confirmed that there had been little interest in scrap imports from the country, while a fourth source attributed the pullback to a struggling finished product market in that region.
"Taiwanese mill scrap prices are dependent on their rebar demand, which remains anemic. Of course, scrap availability will become more challenging should U.S. construction numbers continue to improve."
"It cant be easy to be a rebar mill in Taiwan right now (with the) threat of Chinese rebar exports vs. potentially rising import scrap costs," the fourth source added.
Scrap import costs could rise if container shipping lines follow through with a freight rate increase on April 1, according to several sources.
West Coast exporters face a $100 freight price hike on 20-foot containers and a $200 increase on 40-foot containers based on indications from shippers, sources said.
However, a couple of exporters said shipping lines might not succeed in achieving those proposed levels.
"I keep hearing about container rate increases, but as usual most steamship lines are saying yes in public but discounting in private, yielding even money. Adding $200 per container ($10 per tonne) ocean freight would slow down new sales even more," the first source said.
Another exporter said shippers have yet to announce any firm rate changes.
"Every year the shippers propose the same rate hikes. After negotiations, those increases are usually $25 at best. Negotiations are still under way. (There are) no new rates yet," he said.