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West Coast exporters seek higher scrap prices

Keywords: Tags  ferrous scrap, exports, exporters, containerized shipments, Southeast Asia, Taiwan, Malaysia, indonesia China

NEW YORK — West Coast exporters of containerized ferrous scrap are pushing for price increases into Taiwan and other Southeast Asian countries following a week dominated by stronger domestic sales.

Sufficient price increases in a range of $15 to $20 per gross ton from the few domestic mills that West Coast companies can ship scrap to left many exporters with no immediate need to negotiate prices with Asian buyers, resulting in very few trades this past week, sources said.

Market participants reported price offer ranges of anywhere between $355 and $365 per ton for an 80/20 mix of No. 1 and No. 2 heavy melt scrap delivered to Taiwan.

A few sources speculated that embattled finished steel prices and demand from countries like Taiwan, Indonesia and Malaysia will make it tough for exporters to raise prices any further.

"(Taiwanese) mills are reluctant to take orders because they are not selling their inventory well. I think the market can go down because they have bulk cargoes coming in December and will not need a lot of scrap," said one exporter.

A larger number of sources, however, argued that tighter supply of scrap and higher domestic prices give them enough ammunition to demand a price increase.

"I am expecting a total of $10 increase on containers by next week after three weeks of the same prices. We did not sell this week as we anticipate the market is moving upward next week," a second exporter said Nov. 7.

A third exporter said that Asian buyers will be forced to raise prices if they need U.S. scrap since exporters have found enough demand locally.

"We can find no one in Asia who is buying at the moment—although if you sell cheap there may be some buyers out there. Taiwan is basically dead. Vietnam will buy but U.S. domestic prices are high enough that loading containers doesn’t make sense. With India dead and Turkey dropping prices it appears that export will be difficult for the next few weeks," he said.

Market participants said China continues to be well behind other countries on price bids, while buyers in Indonesia are fighting off recent increases in price offers.

A trader in China said he expects price bids from Taiwan and other Southeast Asian countries to inch higher gradually but ruled out any big moves from China.

"China’s scrap price is still far behind the others in all of Asia. Except (two large Chinese producers), almost no Chinese buyer can afford to buy any bulk scrap cargo over $380 per tonne for HMS 1&2 (80:20)," he said. U.S. bulk offers to South Korea and China, meanwhile, were reportedly at $395 per tonne and higher, sources said.

A mill buyer in Indonesia said his mill has put a hold on buying while it navigates current price offers.

"I have found that prices of container cargoes were up from the last two weeks. We are getting offers of shred at $395 to $400 but are on hold as we see these prices are high in relation to our sales prices, which have a resistance to increase," he said.

A fourth U.S. exporter reported a late-week sale of No. 1 heavy melt into Taiwan at $375 per tonne, suggesting that "the market is up between $15 and $20 right now."

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