Miller on scrap: Different paths for US, foreign exports

Written by Stephen Miller

After a brief decline in the price of scrap for the Turkish market, which peaked in December at approximately $424 per metric ton (mt) for HMS 80/20, the market has bottomed at $405/mt on cargoes from Europe. Since then, a European cargo was sold at $414. Scrap exporters from North America have not sold at these levels. The lowest is $419/mt CFR Turkey done a week ago. This reflected the strength in the US scrap market. On Thursday, another cargo from the US changed hands at the same price.

SMU reached out to an executive for a large scrap exporter. He believes the next round of purchases for the US will be no lower than that level. The executive said the rebar market has improved in Turkey, noting prices have increased into the low $600s. This should give Turkish mills enough of a cushion to be able to afford to buy at where the North American price has gone lately.

Looking across to the US West Coast, bulk activity has picked up a bit. There have been regular sales into South America. The Southeast and South Asian markets have also been buying, with the latest prices being about $420/mt CFR.  

Not so in the containerized scrap export market. SMU contacted long-time industry veteran Phil Hoffman, chairman of Hoffman Iron & Steel. He said West Coast prices are weakening lately.

Hoffman continued that last month dealers could expect prices going to Taiwan to be in the neighborhood of $375/mt CFR CY. Currently, “$360, maybe $365 .”

He added that Vietnam has basically dropped out of the export market due to an influx of imported steel from China and competition from domestic integrated producers. Hoffman expects more weakness in these markets.

With the US scrap settlements expected within days, it should be interesting to see how domestic steel mill buyers interpret this dichotomy in the export markets.    

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