Ferrous scrap export activity has finally picked up momentum on
the West Coast after several weeks of lackluster sales, with at
least six bulk cargoes reportedly sold in the past week.
said that at least five cargoes were sold to China and South
Korea in addition to a bulk cargo sale to Taiwan (
amm.com, July 16).
Four bulk cargoes were
sold to a single consumer in China at a price basis of around
$362 per tonne c.i.f. China for an 80/20 mix of No. 1 and No. 2
heavy melt. Some sources said they believe the price for at
least one of those cargoes was as high as $365 per tonne on an
HMS 1&2 (80:20) basis, which others believe actually
reflected a composite price of heavy melt and shred and not the
heavy melt price.
The Chinese mill
reportedly was in the market for a few weeks with bids at $350
to $355 per tonne but was forced to conclude at much higher
prices after sellers refused to engage the low bids, according
to one market participant.
In addition to the
sales to China, one consumer in Korea opted not to engage in
the Japanese scrap market and turned its attention to U.S.
scrap, sources said. Korean demand for U.S. scrap plummeted
over the past few months after a change in the value of the
Japanese yen made Japanese scrap far more viable.
Although the reasons
are still unclear, at least three mills reportedly have turned
toward the U.S. once again for scrap. A Korean consumer that
picked up a bulk cargo in late June at $355 per tonne c.i.f.
Korea on an HMS 1&2 (80:20) basis reportedly is soliciting
offers along with a second major consumer. U.S. offer prices to
Korea are now at $370 per tonne for HMS 1&2 (80:20),
according to several sources.
The $370 price offers
are well above this past weeks sole U.S. sale to a
different consumer in Korea at $365 per tonne c.i.f. Korea for
HMS 1&2 (80:20) and $370 per tonne for shred.
A source at a fourth
Korean consumer said offer prices were as high as $375 per
tonne, with containerized scrap offers at $345 per tonne.
One U.S. exporter said
he was relieved to see the market rebound in price and demand,
while a buyer said it was still unclear how much further prices
would increase from the current $362- to $363-per-tonne
Sources said there
were rumors of at least two more sales to Korea, although none
could confirm any details. A second exporter suggested it could
be a case of "double reporting" by market participants.
A third exporter said
the recent sales indicate that the market has bottomed.
Aside from the market
still trying to determine why Korean mills are looking away
from Japanese H2 scrap, there appears to be equal uncertainty
about the reasons for the turnaround in interest from
"I dont really
know whats specifically driving this increased demand,"
the third exporter said, although a better-than-anticipated
economic report from China could have encouraged some steel
producers to reconsider their previously pessimistic
were drawn down every week for the past few weeks. Iron ore is
up. The gross report out of China wasnt as bad as people
thought it would be. They thought it would be bad so they
didnt buy scrap. So scrap inventories were down. Now, if
they expect market conditions to improve they have to start
buying scrap," he said.