NEW YORK West Coast containerized scrap export prices are on the rise after being spurred by rising scrap and finished product prices in key Asian markets, according to market participants.
Sources reported containerized sales of an 80/20 mix of No. 1 and No. 2 heavy melt at anywhere between $340 and $345 per tonne delivered to Taiwan, indicating a $10 increase from a month ago. Most sales were reported in the middle of that range at $342 and $343 per tonne for HMS 1&2 (80:20).
"Container sales have stabilized and are inching upwards," said one exporter, who anticipates demand from Taiwan will pick up this week. "(...) the rebar price in Taiwan (as well as the local scrap price) has increased. Expectations are for U.S. scrap sales in the $340 to $345 range."
A second exporter said his company has opted to hold off on any sales until prices strengthen further, indicating that the company was extremely bullish with offers well above transaction levels. "We are in a holding mode. The last numbers that I heard (for heavy melt) were in the $355 delivered Taiwan (range)," he said.
A third exporter, however, claimed that offer prices had not yet surpassed the $350 mark. "HMS offers to Taiwan are now $344 to $347 and the latest sales have been at $342 to $343," he said.
A buyer for one Taiwanese steel producer said his buying prices were closer to $340 per tonne, with an increase anticipated. "Dollar weakening is the major factor," he said. "Suppliers are holding back on offers, expecting upward movement. I would tend to agree, but truly the upside is limited as mills are still in the red based on finished prices vs. import scrap prices."
A supply-side source in China said he anticipated improving iron ore prices would provide scrap prices additional support.
Gradually improving containerized scrap export sales prices could eventually lift dock buying prices should the bulk market record a similar recovery, according to a market source. Docks in southern California recently dropped buying prices by $10 per gross ton but strengthening sales could reverse that.
"The premise is that no one was making money at the old prices. The drop reflected a gain in lost margin that had deteriorated in the last months with competitive pressures. That was reflected in the number of yards that started to reduce hours or close their doors as they ran out of money," he said. "No one would argue that no one was making money at the old prices, just turning inventory. I do agree that the prices will eventually rise if the market continues to improve. They have not yet come up enough to make that happen. Especially bulk. And the docks are driven by bulk prices, not container."