NEW YORK U.S. ferrous scrap bulk export prices trended in different directions this past week as tags for West Coast sales dropped while continued inactivity from Turkey left East Coast prices unchanged.
East Coast export prices to Turkey have been flat for more than two weeks as mill buyers have shown no interest in U.S. cargoes. As a result, AMMs East Coast Ferrous Scrap Export Index for an 80/20 mix of No. 1 and No. 2 heavy melt remained at $375.58 per tonne f.o.b. New York on Monday.
But market participants said they expect a change this week as Turkish mills look to cover scrap inventories for the end of April and into May.
A buyer for one Turkish producer said export prices to Turkey could drop from previous levels of $401 to $405 per tonne c.i.f. Turkey for an 80/20 mix of No. 1 and No. 2 heavy melt. "Buyers are trying for $390 to $395 per tonne for U.S. HMS 1&2 (80:20), but sellers insist on $400. Expectations are between $395 and $400 for a potential deal," he said.
One North American exporter said anticipated weakness in the U.S. domestic market could result in weaker export tags. "I think the American market now looks like it will be down $20 (per tonne), so I expect export prices to be somewhere around $395 to $400 for shred this week," he said.
Asked if exporters would fight such declines, citing margins, the North American exporter said prices would be determined by demand. "I dont think it has to do with margins. It has more to do with what they can afford to pay and what the real volumes are," he said. "Are people supposed to guarantee you make money?"
A second U.S. source said exporters could get some reprieve from bulk freight rates, which could be poised for a drop in the near term. "I expect to see a drop in the handysize (vessel) market over the next couple of weeks with so many ballasters popping up," he said.
On the West Coast, three bulk cargo sales reportedly were booked in the past week after exporters accepted a decline in prices, bringing some export action back to a region waiting for market conditions to improve in Far East Asia.
Two bulk vessels carrying a mix of heavy melt and shred to China were reportedly booked at a composite price of $415 per tonne c.i.f. China, while a cargo to South Korea traded at $415 per tonne c.i.f. Korea for HMS 1&2 (80:20) (amm.com, March 29).
The sales put AMMs West Coast Ferrous Scrap Export Index for HMS 1&2 (80:20) at $372.63 per tonne f.o.b. Los Angeles on Monday, down 2.5 percent from $382 the previous week.