NEW YORK West Coast export prices for containerized ferrous scrap are on a gradual incline due to a renewed uptick in demand from Taiwan.
Market participants said that a long lull in interest from mill buyers in Taiwan gave way to better market conditions this past week after mills in the region beat down the market too hard and rebar prices in Taiwan recorded a little boost.
Sources said prices have reclaimed about $5 per tonne from mid-April levels (amm.com, April 16), with trades reported this past week in a range of $355 to $360 per tonne for an 80/20 mix of No. 1 and No. 2 heavy melt delivered to Taiwan.
At the moment, Taiwan appears to be the sole supporter of the West Coast scrap export market, as South Korean consumers continue to focus on cheaper imports from Japan, buoyed by a favorable yen, and demand from China remains depressed, sources said.
"The container market has stabilized and increased slightly in the last week. Sales are back over the $360 mark and should be around $365, although offers vary," a source at one large exporter said.
The slight rise in prices this past week follows a sharp fall in West Coast ferrous scrap export prices for containerized scrap in early April.
"Once again, the Taiwanese dropped prices too low," the exporter said. "They have a practice of driving the price down until it affects flow. In addition, the rebar market drives the scrap purchase price. Rebar prices (in Taiwan) rebounded slightly, pulling the scrap price with it," he said, adding that China and Korea have not been major factors in container sales.
Other U.S. sources said that they had yet to record sales at prices as high as $360 per tonne, with many reporting that Taiwanese bids to their companies were still at around $355 per tonne.
A second West Coast exporter said that the market had offered mixed signals this past week.
"I understand that a major yard tendered an offer for HMS 1&2 (80:20) containerized to Kaohsiung (Taiwan) that was rejected and not countered," he said. "However, they have increased buying prices for HMS so they could fill an order."
But a market participant familiar with this particular development told AMM that the major yard had only increased intracompany buying prices to secure scrap from one of its own yards to fill an existing order. The source said that the major yard did not raise buying prices for heavy melt.
"In this market, (the company is) trying to lower prices. (It) temporarily raised an interbranch price to fill an order, but there were no increases to outside suppliers," he said.
The second exporter also said that a large trading company has increased container buying along the West Coast for limited tonnages for heavy melt and plate and structural scrap.
"Bookings indicate that the container ship is destined to three Chin(ese) East Coast ports (and the vessel is) not stopping in Taiwan or Korea," he said.
The exporter said that he was still looking for demand for new steel to merit any price increases for scrap.
"I see Asian and U.S. steel mills increasing new steel prices only to discount those increases the next day," he said. "Econ 101 is still the rule: there must be demand to support the prices. Yes, scrap is in short supply, but there must be demand to balance the equation."
Meanwhile, a source in China confirmed that demand from the country was still weak.
"These days, the market is really soft and there is hardly any news about Chinese imports," he said.
Meanwhile, sources said that the bulk market remains quiet, with some offers, no takers and bids from South Korea in a range of $385 to $388 per tonne c.i.f. for HMS 1&2 (80:20).