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Bulk scrap export prices dip; floor may be near

Keywords: Tags  ferrous scrap, scrap exports, HMS, heavy melt, shred, Sean Davidson

NEW YORK — Prices for U.S. bulk ferrous scrap exports to Turkey slipped Feb. 20 as Turkish mills continued to book cargoes at attractive rates.

One exporter reportedly sold 40,000 tonnes of a 90/10 mix of No. 1 and No. 2 heavy melt at $352.50 per tonne c.i.f. Turkey, although several sources said that the material was more likely to be HMS 1&2 (85:15) quality.

A second exporter sold 30,000 tonnes at a composite price of $351 per tonne for 12,000 tonnes of HMS 1&2 (80:20) and 18,000 tonnes of shred to the same Turkish mill. The sales price suggests a HMS 1&2 (80:20) price of about $349 per tonne, down 1.4 percent from previous sales (, Feb. 19).

Some market participants expressed surprise at the price due to the exporter’s higher freight costs borne out of a two-port loading. Sources said the exporter likely took the sale to clear inventory and position itself for a sale to what many believe will be a U.S. steel producer-owned scrap company.

However, with both sales most market participants said prices likely have reached their bottom as $350 per tonne for U.S.-origin HMS 1&2 (80:20) was the target for many Turkish mills.

"I feel we are at bottom or very close to bottom. It may drop a few dollars, but not more," one Turkish trader said.

Scrap collection prices at East Coast docks support the current level and anything below this could create issues for collection, he said. "On the other hand, scrap prices softened by about $50 per tonne (this year). However, Turkish rebar prices have softened only about $15 to $20 per tonne. Let’s see how things move."

Some U.S. sources also suggested that the market was at or near its floor.

"I believe the export market is finding a bottom in this range. Further, U.S. exporters’ pricing has likely already bottomed out simply based on availability as we look into March," one U.S. trader said.

A U.S. exporter agreed. "We are seeing a stabilization in the markets. At this time the demand appears to have eaten up any surpluses in the (East and West Coast) market," he said.

A second Turkish trader said that since Turkish rebar prices have not followed the drop in scrap prices, a slight strengthening is possible. "The market is more or less flat now. Turks are more or less confident that they can sell rebar at equivalent numbers (so) we might see a few dollars up in the coming days," he said.

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