NEW YORK A bulk
ferrous scrap cargo has shipped off the East Coast to Turkey at
prices well below offers earlier in the week, cementing the
bearish outlook that has rapidly gripped the market.
Uncertainty on price
direction in the U.S. and Turkish scrap markets forced one U.S.
exporter to ship cargo carrying mostly heavy melt scrap at
about $10 below prices offered to Turkey Jan. 13, according to
This is the first U.S.
bulk cargo sale to Turkey in more than five weeks and market
participants said the cargo shipped Jan. 15 at $396 per tonne
c.i.f. Turkey for an 80/20 mix of No. 1 and No. 2 heavy melt.
Barely a day or two earlier, U.S. offer prices were reported in
a range of $405 to $412 per tonne, while Turkish mills
countered with bids in a range of $395 to $400 per tonne
amm.com, Jan. 13).
"There were concerns
that U.S. domestic scrap prices are coming down, so its
just locking in sales. You dont want to be caught holding
the highest inventory," one market participant said.
Concerns that Turkish
mills would continue to secure scrap from Europe and leave U.S.
exporters with unsold inventory also likely contributed to the
exporters reasoning for the sale, he said.
The cargo, which also
comprised small volumes of other grades such as shredded scrap,
was originally offered at $398 per tonne for HMS 1&2
(80:20), according to a source in Turkey.
Exporters are likely
to continue gauging domestic mills interest in their
scrap as Turkey remains reticent on bulk orders and container
exports have also dropped significantly.
One U.S. trader said
bulk exporters continue to offer scrap to U.S. mills, adding
that one exporter unsuccessfully offered shredded scrap into
the Ohio Valley at $425 per tonne.
"I think all exporters
are trying to sell tons inland. Even at down $30 from earlier
numbers it is better than export. Once we get the domestic
shred numbers to $410 per ton, then they will stop offering,"
traders speculate that prices will continue to be under
"I see the scrap
prices loosening in the following weeks since the final product
prices are way below the cost," one trader said.
"Turkish mills are
currently cutting production from 30 to 60 percent and are
still not in a purchasing position," a second trader said.
"Mills have the
expectation that there could be a price decreasethat the
U.S. will sell at the $385 to $390 levelbut personally I
believe this is not very possible as theres not much
material available on the market," he said. "I believe only
Turkey is having a crisis and the rest of the world has had a
hopeful start to 2014."