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W. Coast ferrous scrap export prices weaken

Keywords: Tags  scrap, ferrous scrap, West Coast exports, Dragon Boat holiday, scrap prices, Sean Davidson

NEW YORK — U.S. West Coast export prices for containerized ferrous scrap are on shaky ground, with Asian consumers pushing for lower tags amid light demand.

Most market participants speculated that prices for an 80/20 mix of No. 1 and No. 2 heavy melt will range from $330 to $335 per tonne c.f.r. Taiwan this week, down from $335 to $338 a week ago.

A buyer for a Taiwanese steel producer said that he had already booked U.S. scrap this week at $330 per tonne. Prices have continued to drop due to poor sales of Taiwanese finished products brought on by cheaper offers from China to countries throughout Asia, he said.

The buyer said that consumers in Thailand have managed to import scrap at $320 per tone c.f.r. Thailand from South and Central America, establishing $330 to $335 for U.S. HMS 1&2 (80:20) as "the fair current assessment."

Several West Coast exporters are still filling orders from two weeks ago, which were booked in a range of $345 to $350 per tonne c.f.r. Taiwan, he added.

U.S. exporters said they expect prices to trend within a few dollars of last week’s range of $335 to $338.

One exporter reported making no sales until June 12 due to the Dragon Boat holiday in East Asia. "There is a belief that those prices ($335 to $338) will hold next week as mills attempt to put a floor on rebar prices in Asia," he said. "There is also some belief that we are nearing a floor on prices. We’ll have to wait and see."

A second exporter, however, claimed that prices have already dropped below last week’s levels. "I think that’s a good price if you can still get it—$325 is what I am hearing today" he said June 12. "And there’s resistance—I think they’d like to go lower. ... (South) Korea just dropped today, and there is room for further decline all around. I don’t see an increase anytime soon."

A buyer for a South Korean consumer said he had received U.S. offers at $330 per tonne c.f.r. Pusan, Korea, but was buying at $320 per tonne from exclusive suppliers.

A few other exporters offered similar forecasts of weaker prices.

A third exporter said that the Taiwanese price seems to be $330 to $335 per tonne. "Taiwan has few sales for finished goods, summer energy restrictions and sufficient domestic material for their current needs," he said. "Some traders feel this is the bottom of the market. My opinion is (that it) can drop further."

Meanwhile, a fourth exporter said that prices are dropping along with demand from Korea and Taiwan, which are both oversupplied.

A fifth exporter noted that some major mills didn’t run at full production in May, affecting demand. "Some of it (has) to do with the increased energy costs going into the summer," he said. "However, many believe we have reached bottom and can see some turnaround later this month."

At least one exporter, however, said that U.S. offer prices have already climbed above last week’s levels. "Offers are above $340," he said. "Suppliers are really resisting the market. It is hard to buy tons today for sales levels of $335 to Taiwan ... nearly impossible."

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