NEW YORK North American bulk ferrous scrap export prices nose-dived over the past week after a few sales from the East Coast to Turkey were concluded at significantly lower levels.
U.S. East Coast exporters stepped away from the market Monday after a bulk sale from Canada was concluded at about $10 per tonne below U.S. offers and expectations, market participants said.
Sources said the Canadian exporter sold a large bulk vessel of No. 1 heavy melt, shredded and bonus scrap at a composite price of $380 per tonne c.f.r. Turkey.
Reports of the Canadian sale came shortly after sources reported that a U.S. exporter had booked a bulk sale to Turkey to $392 per tonne c.f.r. Turkey for an 80/20 mix of No. 1 and No. 2 heavy melt scrap. The cargo will also reportedly carry shredded scrap, sold at $397 per tonne, sources said.
Early last week, sources said an irregular exporter of bulk scrap to Turkey concluded a smaller 30,000-tonne sale at $395 per tonne c.f.r. for HMS 1&2 (80:20), $400 per tonne for shredded and $405 per tonne for bonus scrap (amm.com, Nov. 28).
The rapid decline in sales prices to Turkey from the East Coast has forced several U.S. exporters to withdraw from the market, sources said.
"The Canadian sale surprised everyone. Suddenly suppliers have backed out and closed their books for December. They were still in the $390 range for heavy melt. But the Canadian sale is a big drop. If people were thinking twice to sell at $390, people will completely back out at the new level," one source said.
"I was in talks with two suppliers who were looking at exporting to Turkey. After the Canadian sale, we wished each other merry Christmas and said wed talk in the new year," a second source said.
U.S. sources are now speculating that exporters will move the scrap into the domestic market, likely causing some weakness in domestic tags for December. The U.S. market for December is expected to trade this week.
Last weeks bulk sales caused a considerable drop in AMMs East Coast Ferrous Scrap Export Index, which settled Monday at $364.92 per tonne for HMS 1&2 (80:20) f.o.b. New York, down 4.7 percent from $382.77 per tonne previously.
"Turkish mills are still suffering from lack of demand on the finished steel, which is keeping them away from the scrap market despite (the fact that) they need scrap for January shipment. They also see there is plenty of scrap available in the market, therefore preferring to wait in order to put more pressure on scrap prices," a third source said. "But unless they do not consider cutting production, they have to step in and start booking January shipment cargoes sooner or later, which I think will balance the supply and demand during December."
On the West Coast, two confirmed bulk cargo sales to Taiwan moved AMMs West Coast Ferrous Scrap Export Index for HMS 1&2 (80:20) up just 88 cents to $364.50 per tonne f.o.b. Los Angeles vs. $363.62 previously.
West Coast sources said two cargoes of HMS 1&2 (80:20) were sold by different exporters to different mills in Taiwan at $400 and $402 per tonne c.f.r., respectively. The sales were completed about 12 days ago but were only confirmed this past week.