Several U.S. exporters hope to see a small bounce in bulk
ferrous scrap export prices, with sentiment boosted by a fresh
round of Turkish purchases of European material.
A slew of deals
concluded over the past four trading days indicate a modest
strengthening in prices of European and British scrap shipped
U.S. exporters have
yet to log bulk sales to their largest customer this week, and
some market participants suggested that only one or two
companies likely have the inventory to sell, with others
reportedly sold out.
At least seven bulk
cargoes were sold from the United Kingdom and Europe over the
past week. Normalized prices for an 80/20 mix of No. 1 and No.
2 heavy melt indicate that U.S. tags should range between $340
and $345 per tonne c.i.f. Turkey.
Some Turkish mills
have already bid for U.S. HMS 1&2 (80:20) at $340 per
tonne, which was met with offers of $345 to $350 per tonne,
market participants said. Several sources indicated that deals
could be negotiated in between the bid-ask range of $340 to
$345 per tonne.
Since the last U.S.
bulk cargo sale was booked at a value of about $337 per tonne
for HMS 1&2 (80:20), any deals concluded in the current
bid-ask range would represent a modest uptick and would halt a
three-month price decline.
"Prices have certainly
stabilized," one market source said. "There are buyers that
would like to buy U.S. scrap at $340. Exporters will push for
$345. Whether prices climb back to $350 is still an
participants found the trend reversal odd, while some
maintained that the increases had merit.
"It is strange if
Turkey is suddenly raising prices," one European exporter said.
"The whole world is still in a deep depression,
Asiaespecially Indiais not reacting."
But a mill buyer said
the slight uptick was merely a correction. "The market for
scrap went down too much for no reason," he said. "Now it is
going up to a level where it is supposed to be."
A U.S. exporter
agreed. "(The) scrap price seems to be stabilizing now or even
slightly correcting upwards. After the latest sales from
Belgium/Holland at $315 for HMS 1&2 (75:25), the U.S. going
below $340 c.i.f. Turkey for HMS 1&2 (80:20) has become
rather unlikely," he said.
British exporters are
also enjoying favorable currency markets, with the latest bulk
sale from the United Kingdom to Turkey said to have secured one
scrap company an equivalent of $341 per tonne due to better
A fourth source said
that many Turkish mills are now actively seeking scrap cargoes,
while a fifth said that the mills have either secured new
orders for finished product or are stocking material to prepare
for the imminent market lull during the Ramadan holiday in the
second week of July.
But a few exporters
arent as optimistic about the markets
"We do not see a rise
in the market," a second European exporter said. "July to
August is a vacation period in Europe, with most steel mills
closing production due to lack of demand, low prices of steel
and most of them working at losses. We expect prices to keep
around current levels, and if some seller needs to sell we
expect the offer will be lower to get the order."
conditions have offered mills a "buying opportunity," another
source said. Weak supply-demand fundamentals for finished steel
continue to plague the global market with little respite on the
horizon, he said, questioning how long the current scrap price
uptick could last.
The Turkish market
continues to be affected by cheaper Chinese offers, he said. If
Turkish mills choose to compete while paying higher scrap
prices, it would result in margin cuts that perhaps only a few
Turkish mills would accept to keep furnaces running, he