NEW YORK East Coast export prices for bulk ferrous scrap shipments inched slightly higher this past week after two sales to Turkey were concluded above previous price levels.
Two U.S. exporters sold bulk cargoes to different Turkish mills at similar price levels in recent days. One concluded on June 28, a day that also saw at least five other bulk sales from Europe and Russia as Turkish mills looked to secure inventory before a long religious holiday, several sources said.
One U.S. exporter sold a mixed bulk cargo June 28 at $359 per tonne c.i.f. Turkey for an 80:20 mix of No. 1 and No. 2 heavy melt, $364 for shred, and $369 for plate and structural scrap, sources said.
The sale followed a June 25 sale by a different exporter for a full 40,000-tonne cargo of HMS 1&2 (80:20) at $359 per tonne.
These sales represent a $3-per-tonne increase in export prices to Turkey after the last bulk sale to Turkey was concluded at $356 per tonne c.i.f. Turkey in mid-June (amm.com, June 21).
Buyers in Turkey and exporters in the United States and Europe told AMM that they expect prices to strengthen even more in the next round of trades.
"Prices might go up a little more," a buyer for one Turkish steel producer said. "(Turkish) mills are buying for August now, so there wont be too many sales during the next 10 days."
One U.S. exporter said prices should already be slightly higher than the two bulk sales that concluded this past week at $359 given market conditions.
"Personally I thought prices would be a little higher, but based on collection prices (at export docks), there is margin in it for these guys," he said. "I also think there might be some buying during Ramadan just like last year."
One European exporter said that a bulk sale from the United Kingdom at $359 per tonne for HMS 1&2 (80:20) late July 28 means that U.S. prices are likely to rise further, since U.S. heavy melt usually trades at a premium to most European heavy melt.
"We have just sold (a) cargo of HMS 1&2 (80:20) ex-United Kingdom to (an) end-user in (the Turkish city of) Izmir at (a price) level of $359 per tonne, and we still have inquiries for end-July arrivals, which (we are) finding from our supply availability perspective difficult to comply with even though (we are) being enticed by bids that make me regret having made the earlier mentioned sale," he said.
"Ramadan starts on July 8 to 9 and ends 30 days thereafter," he noted. "From (the) perspective of supply availabilities, the delivery of cargoes would be for early August arrivalswhen Ramadan ends. So frankly, (I) do not understand the fixation on Ramadan as having a potentially adverse impact on the market."
In his view, scrap prices rallied because of supply-driven fundamentals and will continue to be sustainable over the summer period, during which time supply tightness will be a continuing phenomenon buttressed by a robust U.S. domestic market, he added.