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More upside eyed in US scrap export market

Dec 11, 2019 | 11:35 AM | Pittsburgh | Lisa Gordon

The United States' ferrous scrap export market has rebounded due to short supply and increased competition on the domestic and international fronts, with more upside said to be in store.

Turkey continues to source from the US at a slow pace and exporters are taking their time in striking deals, knowing that supply is tight and domestic mills are paying a premium price for obsolete grades like No1  heavy melt and shredded scrap.

The generous prices being paid are supply driven and not due to Turkish rebar prices, an East Coast exporter said.

Turkish producers increased rebar prices to $445-450 per tonne fob, this source said, adding that the price paid for scrap should ideally be $275-280 per tonne in order to maintain the $170-per-tonne spread between scrap and finished product.

In the latest US ferrous scrap export sale to Turkey on Monday December 9, an East Coast exporter sold an unspecified amount of an 80:20 mix of No1 and No2 heavy melting scrap (HMS) at $295 per tonne and shredded scrap at $300 per tonne. That sale was up by $23 per tonne from the previous sale.

The East Coast exporter did note that this recent sale was for January delivery and Turkish producers were hoping to capture higher prices on finished steel rebar when they melt this cargo.

A second East Coast source that sells to the docks said he expects the HMS export price to hit the $300-per-tonne threshold within the next week.

The stronger selling price to Turkey has raised dock pricing. Fastmarkets' assessment of the steel scrap, No1 HMS, export yard buying price, delivered to yard Boston was at $200 per gross ton on December 11, up by $10 per ton from the previous week. The same grade was at $210 per ton in New York and in Philadelphia, both up by $15 per ton.   

The No1 HMS export yard buying price in Philadelphia hit a low of $165 per ton in September and a high of $275 per ton in March, according to Fastmarkets' pricing records.

The new cargo sale to Turkey put Fastmarkets’ steel scrap HMS 1&2 (80:20), export index, fob New York at $265 per tonne on December 11 and the shredded index at $270 per tonne, both up by $23 per tonne from the previous week. 

The HMS 1&2 (80:20) export index, fob New York, has nearly returned to the $269-per-tonne level recorded in August. The lowest point thus far this year was reached in early October, at $190.67 per tonne, while the high was $315 per tonne in mid-February, according to Fastmarkets pricing data.

The West Coast cargo and container market remained quiet. With no sales, Fastmarkets’ steel scrap HMS 1&2 (80:20), export index, fob Los Angeles held at $255 per tonne on December 11. The index's highest point this year was $326 per tonne in late March and the low was $214.50 per ton in early October, according to Fastmarkets data.