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Ferrous scrap exports fall as China retreats

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


NEW YORK — U.S. ferrous scrap exports plummeted in May compared with the same month last year following a dramatic cutback in demand from China and Turkey.

Exporters shipped 1.55 million tonnes of ferrous scrap, down 27.8 percent from nearly 2.15 million tonnes in May last year, as shipments to China plunged 75 percent to 55,420 tonnes from 222,065 tonnes and sales to Turkey fell 36.9 percent to 441,078 tonnes from 699,537 tonnes, according to the latest U.S. Commerce Department data.

May did deliver one anomaly: Commerce data indicated a single bulk cargo sale from Los Angeles to Turkey, a route that is never competitive due to significantly higher freight costs. Ports on the East and Gulf Coasts typically ship to Turkey with better freight rates, while West Coast ports find Asian routes more viable.

Turkish market participants said that the cargo was sold to a Turkish mill that had a vessel returning from Asia, where it had unloaded finished steel products, and was routed via Los Angeles to collect scrap, thereby avoiding an empty backhaul.

According to Commerce data, the Los Angeles-to-Turkey cargo was sold at $348 per tonne f.o.b. Los Angeles for 10,800 tonnes of No. 1 heavy melt, $353 per tonne for 22, 000 tonnes of shred and $358 per tonne for 12,249 tonnes of plate and structural scrap.

One market participant said the cargo from Los Angeles to Turkey traded at around $381 per tonne c.i.f. Turkey.

During the first few weeks of May, f.o.b. Los Angeles prices for bulk volumes stood at around $335 per tonne for an 80/20 mix No. 1 and No. 2 heavy melt based on bid and offer ranges between exporters and South Korean producers, while delivered prices to Turkey hovered at around $375 per tonne c.i.f. for HMS 1&2 (80:20).

May generally was a lackluster month for U.S. ferrous exports, with shredded scrap shipments falling 43.4 percent to 432,155 tonnes from 762,868 tonnes and No. 1 heavy melt dropping 29 percent to 532,911 tonnes from 750,274 tonnes in the same comparison.

U.S. ferrous exports in the first five months of this year totaled 6.31 million tonnes, down 25.8 percent from nearly 8.51 million tonnes a year earlier, with shipments to China down 62.9 percent and sales to Turkey 38.3 percent lower.

Paul Schaffer, New York, contributed to this story.



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