Hoffman: Asian FE Scrap price bottom?

Numerous mid-sized California and Baja Mexico export yards had little to no inventory on the ground last week as most had sold forward in the falling March market. Looking to secure their margins, they dropped prices across the scale that resulted in lower-than-normal flows.

“I’m sold out through mid-April and even longer if the flow doesn’t pick up” one yard owner said, which turned out to be the position of numerous USWC suppliers. Meanwhile, Asian buyers attempted to drop to prices to $335/mt FAS – $350/mt CFR Taiwan for container scrap, but by the time buyers made the $335 offers most suppliers had taken orders at above $340 on the way down. One supplier who held out with his inventory actually achieved a $5 increase to $345/mt FAS – $360/mt CFR Taiwan on March 26.

Meanwhile Japanese scrap exporters/suppliers balked at the latest Vietnamese buyer’s price offers pushing to go below $370/mt CFR Vietnam for short sea shipments of Japanese H2 scrap.

“Suppliers are not going to accept anything less than $370,” according to one major trading company.

Given low flows, USWC suppliers being short on inventory to ship existing orders, and Japanese suppliers holding firm, it seems that the USWC scrap export market and Asia pacific region is at a bottom. The development in Asia combined with the latest Turkish sales in the $380’s indicate that the international ferrous scrap market may be stabilizing, which will likely put pressure on the US domestic market to remain flat or to increase in some areas in April.

Phil Hoffman is speaking at the 2024 Asian Steel Scrap Conference in Ho Chi Minh, Vietnam, on March 27 and 28.