NEW YORK West Coast ferrous scrap exports picked up momentum this week as several factors contributed to a double-digit increase in containerized scrap sales and bulk offers.
Market participants attributed the strengthening to renewed demand from Taiwan and Mexico, limited scrap supply along the West Coast and rising scrap prices in domestic Asian markets.
Sales of containerized shipments of an 80/20 mix of No. 1 and No. 2 heavy melt scrap were reported in a range of $360 to $365 per tonne c.f.r. Taiwan, up $10 to $15 from sales at the end of July (amm.com, July 30). Some sources said offers to Taiwan have already hit $370 per tonne with no takers.
Bulk export prices are also expected to follow the trend with the latest bid-offer range reportedly at $385 to $395 per tonne, as compared to the last West Coast bulk sale into China at $370 per tonne c.i.f China for HMS 1&2 (80:20).
A Taiwanese producer source said scrap prices in Taiwan and China have risen due to a rush for construction steel. He said the demand was driven by a restocking exercise for finished steel and not actual market demand.
There is support from higher new rebar sales in Taiwan and support from Asian markets, one exporter said. Tokyo Steel (Manufacturing Co. Ltd.) raised their scrap buying prices another 500 yen to 1,000 yen. I suspect that there is some speculation in this market, but scrap is not plentiful as demand continues to slowly increase.
Mexico has also returned to the market and has helped to support prices here on the West Coast. Im expecting a strong sideways to up domestic market and a higher export market in September, he added.
A second exporter said demand is returning to the West Coast because Japan exports arent widely available at the moment. Container pricing for heavy melt settled at $360 per tonne c.f.r. Taiwan but now offer prices are higher, but not a lot of volume being offered, he said.
A third exporter said he was baffled at the sudden uptick in prices this week.
I cant figure it out. Weve been offered $350 to $355 per tonne f.a.s., which puts it at about $375 c.f.r. Taiwan. I cant find any justification other than the availability of scrap steel. Demand for new steel isnt anything special, he said.
Some expressed concern that the uptick is only momentary.
A fourth exporter said container prices retreated to a maximum high of $360 per tonne on Aug. 29.
(Theres) a fly in the ointment as world currency shifts have stymied the increase in container orders, he said. Nothing (is) over $360 cfr at this time. Taiwan was able to buy out of Africa and England at better prices. That, and concern over a dropping rebar market, has taken some buyers to the sidelines to await next weeks orders, he said.
Still, most sources said Taiwan is driving the market with China and South Korea both absent. A buyer for a South Korea producer attributed this to the lack of cargo availability and higher offers.
Its difficult to get an offer because they have enough contracts to load. The offer price for bulk is around $385 per tonne c.f.r. (for heavy melt). Chinese and Korean steel mills will try to wait until this market stabilizes, he said.
A fifth exporter said part of the uptick is seasonal, as mills ramp up production in Taiwan.
With the energy costs lowering come fall, many mills have come back to look for inventory as they had moderately bought through the summer, he said.
An exporter based in the Pacific Northwest said exporters in Portland and Seattle will struggle to capitalize on these rising prices due to logistical issues.
There is a container shortage in Portland and Seattle because of the hay season, so containers are limited. Even if we have export sales, we cant ship materials because of that, he said.