NEW YORK A bulk ferrous scrap export sale from the East Coast to Turkey late last week supported previous speculation that prices could strengthen slightly.
A flurry of cargo sales from Europe to Turkey at improving prices early last week had lifted U.S. hopes that three months of declining prices might end (amm.com, June 13).
On June 14, one exporter sold 30,000 tonnes of No. 1 and No. 2 heavy melt (90:10) and shredded scrap at an average price of $349 per tonne c.i.f. Turkey. The price is an improvement of about $2 per tonne over pre-freight prices of HMS 1&2 (80:20) for similar vessel sizes, AMM understands.
The cargo reportedly will comprise of 18,000 tonnes of HMS 1&2 (90:10) and 12,000 tonnes of shred, with a freight cost higher than current freight rates for vessels of 40,000 tonnes or more.
Market participants are uncertain if the sale represents a strengthening market or one that has "bottomed," with the next 40,000-tonne-or-more sale expected to help better gauge the market trend.
The lone East Coast sale sent AMMs weekly East Coast Ferrous Scrap Export Index a touch above previous levels Monday to $315.75 per tonne f.o.b. New York, up 0.6 percent from $313.84 a week earlier.
On the West Coast, U.S. offers have ranged between $360 and $365 per tonne for HMS 1&2 (80:20) delivered to different Asian countries, while bids from South Korean mills were said to be at around $350 per tonne c.i.f. South Korea.
Asian consumers have been relatively quiet, with bid and offer ranges pointing to slightly negative sentiment, market participants said.
"Much of Southeast Asia is preparing for electrical cutbacks on top of an already-weak market," one source said. "I personally dont believe many of the analysts who imply that recovery is around the corner. I dont see it at all. There needs to be substantial demand for new steel, and its just not there."
A second source said that a current bid-offer range of $350 to $360 per tonne c.i.f. South Korea indicates that the East Asian market is poised to slip further, with Korean steelmakers expected to cut output in July and August. Korean mills are unlikely to secure U.S. scrap at $350 per tonne, the source said.
The current bid-offer levels pushed AMMs West Coast Ferrous Scrap Export Index to $328.50 per tonne f.o.b. Los Angeles, down 0.7 percent from $330.71 previously.