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Bulk scrap exports mixed amid low demand

Keywords: Tags  scrap index, heavy melt, shred, exports, steel scrap, plate and structural, HMS, Sean Davidson

NEW YORK — U.S. bulk ferrous scrap export sales recorded mixed results last week as West Coast exporters pushed for more value while an East Coast sale softened prices.

Only two bulk cargoes were sold by U.S. exporters to Turkey last week as Turkish buyers spent the better part of the week celebrating a religious holiday.

According to market participants, one exporter sold a mixed cargo at $377.50 per tonne c.i.f. Turkey for 27,000 tonnes of an 80/20 mix of No. 1 and No. 2 heavy melt, $382.50 per tonne for 15,000 tonnes of shred and $387.50 per tonne for 3,000 tonnes of plate and structural scrap—relatively unchanged on a pre-shipment value from the same exporter’s previous sale a week ago from the Gulf Coast.

However, a 30,000-tonne bulk shipment from a different exporter was about $4 per tonne lower than the last sale of the same volume, indicating that prices could come under pressure. The cargo reportedly went for $378 per tonne for 8,000 tonnes of HMS 1&2 (80:20) and $383 per tonne for 12,000 tonnes of shred.

Despite the lower prices on a delivered basis, pre-shipment values on the East Coast slipped only marginally from a week ago due a large difference in freight rates for the two exporters shipping different volumes and one needing to load material from two ports to complete the sale.

As a result, AMM’s East Coast Ferrous Scrap Export Index settled Aug. 12 at $349.40 per tonne f.o.b. New York, just 23 cents lower than a week earlier.

Meanwhile, uncertainty prevails over the West Coast market due to rumors of possible bulk sales to South Korea.

Sources claim that one Korean consumer intentionally released information pointing to lower-priced sales of $363 per tonne delivered for heavy melt, which some said is at least $5 per tonne below actual market value.

The Korean consumer reportedly booked three bulk cargoes from West Coast exporters, who also were rumored to be negotiating with a second mill in Korea and one in Japan.

One market participant said a deal had been concluded with another Korean mill at $365 per tonne on a heavy melt price basis, while a buyer for a fourth mill in Korea said he had received U.S. offers of $375 per tonne for HMS 1&2 (80:20).

The buyer suggested that currency markets had contributed to a U.S. push for higher prices. "The Japanese yen is getting strong and (Japanese scrap exporters’) offer price is around $365 per tonne now. The market price is keeping strong in Japan, so Korean buyers are looking for U.S. bulk scrap now," he said.

AMM’s West Coast Ferrous Scrap Export Index settled Aug. 12 at $334.94 per tonne f.o.b. Los Angeles, up 73 cents from a week earlier.

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