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Scrap export dock prices fall as demand slows

Keywords: Tags  ferrous scrap, scrap exports, East Coast, West Coast, scrap, Sean Davidson

NEW YORK — Many U.S. ferrous scrap exporters have lowered buying prices at docks along the East and West coasts amid falling offshore demand, market participants say.

Buying prices have dropped $10 per gross ton across all grades, sources on both coasts said, and some suggested that tags might fall for a second time in the coming days.

Prices at the Los Angeles docks dropped $10 on March 19, and at least one San Francisco exporter followed suit March 20, cutting all tags by $10, West Coast sources said.

"The drop is consistent with the downturn in export prices—container and bulk—here on the West Coast. Container prices have been eroding over the last several weeks, and a $10 drop does not cover the total downside," one source said.

"Bulk has been sporadic at best, and those numbers are also softening. The difference is that there is still a premium on bulk vs. container. That does not mean all material is flowing to the docks," he said. "There are still plenty of small shippers that utilize brokerage to ship containers from their yards. Some are still shipping on older orders."

One West Coast supplier said prices offered by export docks remain higher than bids from East Asian mills for containerized scrap. "Even with the price drop, the export yards are paying more than container buyers. So I expect that the shippers will continue to supply the export yards," he said.

A second supplier said that one Californian exporter had taken a few suppliers down $20 per gross ton since the start of the month. AMM understands that the additional $10 drop to some suppliers a week ago pertained to specific container sale changes and was not universal.

Export docks in Seattle and Portland, Ore., may not follow California with a $10 drop, as one large exporter is scheduled to receive a vessel for loading, another source said.

On the East Coast, exporters have dropped buying prices by $10 at docks in Boston, New Jersey, New York and Philadelphia, with others expected to follow by the end of this week, sources said.

"The driving factor is lower prices in Turkey," one East Coast exporter said. "The export market did not go up as anticipated and freights went up, so we got the double-whammy. The market is very thinly traded, so it seems prudent to bring prices back in line with the current market."

"I think people are starting with $10," a second East Coast source said. "I anticipate more drops—at least another $10."

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