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Global impacts of Section 232


A wave of uncertainty has swept over global ferrous scrap markets since President Trump announced on March 1 that imports of steel into the United States would incur tariffs of 25%.

Sellers of scrap to India and Turkey have enjoyed strong prices this year, but these price levels are untested under such conditions. Since Trump’s announcement, traders have stepped away from the market and remain fearful of taking positions should prices fall.

Despite a lull in buying activity, global ferrous scrap prices remained generally stable as Metal Market Magazine went to press. In the bellwether Turkish market, Metal Bulletin’s daily index for Northern European HMS 1&2 (80:20) was approximately $368 per tonne cfr, while the daily index for similar US-origin scrap priced flat at close to $378 per tonne cfr.

At time of writing, Turkish steel mills had stepped back from the deep-sea scrap markets and had made no significant bookings since the week ending March 9. Sluggish demand for rebar in the country’s domestic and export markets also kept the mills out of the scrap markets. It was heard that Turkish rebar cargoes, previously sold to the US, were being diverted to other destinations because of the new import tariff.
Following the US president’s announcement, market participants were unsure about the future direction of the market. A trading source said: “Turkish steel mills are at a standstill, refusing to pay the higher US East Coast prices [for ferrous scrap], while the recyclers feel they should get a result [from the] Section 232 [action]. So, nothing has been sold from the US in the past week.

“Meantime, the Turks actually cut back some production, knowing they won’t be shipping or selling much to the US in the near term, or until the dust settles on the Section 232 decision. So, they need less scrap,” he added.

Turkish mills were heard to be booking short-sea scrap for their urgent requirements. Market participants said that some short-sea cargoes were booked at $361-365 per tonne cfr for CIS-origin A3-grade scrap.

Demand for imported scrap in Turkey could suffer as a result of the US applying tariffs on shipments of Turkish steel, German steel recycling association BDSV told Metal Bulletin on March 12. This is because lower demand for Turkish steel in the US under tariffs could lead to a drop in steel production in Turkey and lower scrap demand from the country, a BDSV spokesperson said.

From the US, there were no new bulk sales heard from either the East or West Coast. 

On the East Coast, prices for containerized shredded scrap took a breather from back-to-back increases, while exporters in Boston caved in to the upward pressure and raised buying prices in the region. Containerized shredded scrap prices on the East Coast were firm at $358-365 per tonne fas.

On the West Coast, prices for containerized HMS 1&2 (80:20) increased, despite rumors that a drop in Chinese billet export prices could affect scrap demand in East Asia.

Sales into Taiwan concluded at $360-370 per tonne cfr in early March. This pushed local prices for containerized HMS 1&2 (80:20) to $355-360 per tonne fas, up from $340-350 per tonne fas the previous week. There is sustained optimism in Taiwan arising from the US tariff announcement, and at least four deals were heard within the above assessment range. Both the number of offers and offer prices for US-origin scrap into Taiwan have increased, with the latest offer levels at $375 per tonne cfr. Buyers have been put off, but prices are expected to stay range-bound as suppliers appear unlikely to let their offer levels drop quickly, sources said.

Finally, trades of ferrous scrap in containers to India declined sharply amid worries about the knock-on effect of the tariffs, although again, prices remained firm. “Nobody is buying. People are scared about what could happen if they take positions and suppliers are not willing to decrease their prices,” according to one trader.

Metal Bulletin’s weekly index for containerized imports of shredded scrap into India was stable at around the $399 per tonne cfr Nhava Sheva on March 16.

*Reporting by Lee Allen in London, Paul Lim in Singapore, Cem Turken in Mugla and Mei Ling Toh in New York, who monitor the scrap markets on a daily basis.

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