Although
US East coast export offers to Turkey have increased in January due to the rise seen in demand from Turkish steel producers, the rises ex-
US scrap offers have failed to gain acceptance in Turkey amid the oversupply created by
scrap suppliers who are seeking to conclude new sales. At the beginning of last week, ex-
US HMS I/II 80:20
scrap prices were at $193/mt CFR, while an ex-
US deal in Turkey for the same grade
scrap was concluded at $185.75/mt CFR at the end of the week.
US domestic
scrap prices for HMS I/II may have settled up during the January buy cycle, at approximately $10.16/mt ($10/gt) on the East Coast and by approximately $20.32-$25.40/mt ($20-$25/gt), in the Ohio Valley, Pittsburgh-Cleveland area, but this month's upward pricing trend has not reached levels needed to attract the eyes of exporters.
"Turkish mills' desired prices may not be attractive but selling export is still a better deal than selling domestic, because you'll need to pay freight costs to move
scrap inland," one source said. "Unless something crazy happens in the domestic market, and prices jump up substantially in February, there's no cost advantage to selling domestically."
In terms of early-sentiment for February prices within the
US market, opinions are currently mixed, as firmed January
scrap prices were directly tied to mills' low
scrap inventory levels and were compounded by
scrap yards' still-inhibited inflow. It should also be noted that although the most recent data from the American Iron and Steel Industry (AISI) indicates that for the week ending Jan. 9, 2016, the capacity utilization rate increased by 10.7 percent week-on-week to 66.7 percent, it is still down 11.8 percent from the same reporting period last year.