NEW YORK Two
West Coast bulk ferrous scrap sales to South Korea have sent
U.S. export prices down for the second straight week.
Barely days after the
results of a benchmark tender in Japan sent prices of
containerized scrap tumbling (
amm.com, Jan. 15), market participants said bulk
sales suffered a similar fate.
Sources said two
exporters each sold one bulk cargo to one of Koreas
largest consumers at $385 per tonne c.i.f. Korea on a No. 1
heavy melt basis$23 per tonne lower than the price paid
by the same consumer just before Christmas and about $9 lower
than sales to Taiwan reportedly concluded earlier this month
amm.com, Jan. 13).
"The biggest influence
was the Kanto tender," said one market participant, referring
to a monthly benchmark tender released by scrap dealers in the
Kanto region of Japan. The Jan. 15 tender was $17 below the
previous month, instantly putting regional scrap prices under
"After that tender the
market has really changed. The $23 drop in Korea will encourage
buyers to try to drive down prices from Japan and Russia a
little more since there is some more room between the Kanto
tender and the Korean bulk deals," he said.
Sources familiar with
the latest West Coast bulk sales to Korea said U.S. exporter
offers first came in at $390 per tonne for No. 1 HMS, with one
exporter reportedly offering the scrap at $410.
The cargoes reportedly
traded at the Korean consumers bid of $385 per tonne,
with one exporter booked for 45,000 tonnes of scrap and the
second for 40,000 tonnes. Both cargoes will include a mix of
heavy melt, shredded scrap estimated at $390 per tonne, and
plate and structural scrap estimated at $395 per tonne.
A Korean market
participant said prices needed to come down to engage Korean
producers that are struggling to find demand for finished
products. "There is no construction in Korea and no demand in
Korea for rebar or HRC. I think first-quarter steel production
in Korea will drop by about 10 percent," he said.