NEW YORK East
Coast ferrous scrap market participants are struggling to find
traction for higher prices due to tepid local and export
demand, AMM understands.
participants reliant on domestic mills in the Mid-Atlantic
region said the closure of Evraz Inc. North Americas mill
in Claymont, Del., in October (
amm.com, Oct. 14) has left scrap dealers with just
three regional mills to supply.
Two of the three
millsChicago-based ArcelorMittal USA LLCs mills in
Coatesville, Pa., and Steelton, Pa.source scrap primarily
from Philadelphia, where Claymont also obtained most of its
scrap. The third regional mill, Gerdau Long Steel North
Americas mill in Sayreville, N.J., rarely sourced scrap
from Philadelphia but has now received several offers from the
Due to this shift in
local supply-demand fundamentals, suppliers in specific pockets
of Pennsylvania, Maryland, New York, New Jersey, Connecticut,
Massachusetts and Rhode Island said they have had to rely
heavily on exporters of bulk and containerized scrap for
conditions for exporters reportedly also have been tough.
East Coast bulk
exporters that sell most of their cargoes to Turkey have found
their largest buyer to be a tricky customer over the past few
weeks, favoring European scrap over U.S. exports owing to a
strengthening dollar (
amm.com, Nov. 12)
Suppliers to exporters
of containerized scrap also have encountered weak conditions,
sources said. Export sales to India, one of two prominent
importers of containerized ferrous scrap from the East Coast,
have all but frozen due to weak economic conditions, several
Meanwhile, a push by
containerized scrap exporters to sell to other Asian markets,
such as Indonesia, Malaysia, Pakistan and Vietnam, has met with
mixed results, with the only meaningful demand coming from Far
East Asia, according to market participants.
Part of the reason
export demand has dropped off is a strong U.S. market, which
pushed scrap prices up between $20 and $30 per gross ton in
November. "Without that, the two Mittal mills, Gerdau
Sayreville and all the exporters would have definitely dropped
prices in November," one trader said.
"Without Claymont as a
consumer there is excess scrap looking for a place to go. The
exporters feel they have first crack at buying most of it," a
Philadelphia dealer said.
A second dealer,
however, suggested that prices could stay elevated in the near
term. "The absence of Claymont may help the two Mittal
millsespecially Coatesvilleand Gerdau buy more
easily. But flows are pretty weak. Weve seen them taper
off ... and with us heading into the end of the year, there
will still be upward pressure on prices," another source said.
To keep scrap from moving west, eastern mills will need to
watch for increases in neighboring regions like the Ohio
Valley, he added.
A third dealer said
his only hope is that exporters will keep local mills honest,
while a fourth dealer said that at least one of the three mills
is attempting to play the market to its advantage. "The local
mill here has dropped prices by $10 per gross ton if you go
back for new orders today. They are saying that they have
enough material coming in right now," he said.
exporters are facing their own challenges. Last week, bulk
prices to Turkey slipped about $5 to $389 to $390 per tonne
c.i.f. Turkey for an 80/20 mix of No. 1 and No. 2 heavy
Mixed signals from
Turkish mills on where their finished product prices are headed
and a bullish domestic scrap market have created an uneasy
marketplace for bulk exporters, a market participant said.
"U.S. exporters are a
little bit confused. For example, (one exporter) is out of the
market. They do not want to sell at even $395 per tonne for HMS
1&2 (80:20). (A second exporter) is reluctant but may sell
only one cargo around these levels (of $390)," he said.
Another export market
source called it a pretty staid market. "Turkish mills have
been slow and are not raising their prices since they want to
keep rebar pricing down. Indian mills arent being
aggressive still. Demand within India is still very weak," he
players said they expect the market to be status quo in
December, with many expecting a brighter January.
A Mumbai, India-based
scrap importer expects Indian demand to return by January.
"Prices of finished products have started improving a bit, but
the gap right now between international markets and Indian
markets is about $30 per tonne," he said.