steel mills succeeded in driving U.S. scrap export prices down
about $10 per tonne after three bulk cargo sales in 10
This put prices for an
80/20 mix of No. 1 and No. 2 heavy melt scrap well below the
prior level of $375 to $378 per tonne.
After three weeks of
inactivity, the first U.S. cargo to Turkey sold about 10 days
ago at close to $369 per tonne c.i.f. Turkey for HMS 1&2
(80:20), market participants said. Since the cargo was
reportedly less than 30,000 tonnes and has a two-port loading,
it is expected to carry a significantly higher freight, which
sent f.o.b. prices plummeting a week ago to around $335 per
tonne f.o.b. New York from $354 per tonne the prior
However, sources said
at the time that the next 40,000-tonne sale would give the
market a truer indication of price levels, and a large bulk
vessel finally traded late last week after another cargo was
booked out of Puerto Rico at prices of $367.50 to $369 per
tonne c.i.f. Turkey.
said one U.S. exporter sold a large 45,000-tonne cargo
comprised only of heavy melt and plate and structural scrap at
a price basis of $366 per tonne c.i.f. Turkey for the HMS
1&2 (80:20) component.
The Sept. 13 sale
AMMs East Coast Ferrous Scrap Index to
settle Sept. 16 at $344.48 per tonne, down from $354.21 per
tonne in mid-August, when the last cargo of a similar size was
sold to Turkey.
Many sources expressed
no surprise that it took Turkish mills about a month to return
to the market.
"After buying 75
cargoes (from June to mid-August) the Turks took a break. So if
you have to sell and only know how to sell to Turkey, then you
need to make it attractive," one market participant said of the
lower export prices to Turkey.
A buyer for one
Turkish producer said declining prices were a result of poor
product sales and possible escalation of the ongoing conflict
Another source in
Turkey said that lower billet prices and the uncertainty in
Syria have worked to drive prices lower, while a third said it
was due to a stronger dollar. A fourth source suggested it was
driven primarily by weak finished steel sales.
"The crisis of sales
of finished steel is very serious and scrap prices many times
do not cover the costs of the steel mills. Unless Turkey
re-enters the market with volume purchases like in August, the
prices will go weaker," the fourth source said.
U.S. source said lower European sales were a contributing
factor. "The (export price drop) seems to be more the fact that
there is a willingness by Black Sea and some European suppliers
to dump material in anticipation of dramatic weakness down the
road. Therefore (a U.S. exporter) probably took the first sale
in a weakening market hoping to avoid getting squeezed
further," he said.
West Coast exporters
also logged some activity last week after a similar spell of
inactivity, with one South Korean consumer booking three bulk
cargoes at a reported price of about $365 per tonne for HMS
1&2 (80:20) c.i.f. Korea.
As a result,
AMMs West Coast Ferrous Scrap Export Index
settled Sept. 16 at $337.14 per tonne, down marginally from
Editor's note: This story was updated Sept. 27. Due to a
reporting error, an earlier version of this story misstated
AMM's East Coast Ferrous Scrap Index settlement price. The
correct price as of Sept. 16 is $344.48 per tonne.