Heading into May, the US scrap export market had enjoyed steady demand from the major international buyers like Turkey in Europe and Vietnam, Taiwan, Korea and China in the Far East. However, as of late, Turkey has been somewhat absent from the US scrap market, while many Far Eastern markets have remained fairly consistent in their purchases.
Activity in the US scrap market among Turkish producers has slumped due to the slowdown in the region's finished export market. Prices out of US East Coast ports as of last week stood at $255-$265/mt CFR Turkey for HMS I/II 80:20 and were trending slightly down. It is expected that US suppliers will not be able to count on a quick return of Turkish buyers; in fact Turkish steel export prices have been softening in the last few weeks and Europe and Black Sea origin scrap has been selling for less than the US offers. Therefore, Turkish mills will be reluctant buyers in the next few weeks.
In contrast, the Far East market has remained active, including some reports that China has returned to the US market with bulk transactions with a few suppliers. Prices to the Far East market have been reported at $275-$280/mt CFR for HMS I/II 80:20, mostly in containers, with unconfirmed Chinese bulk bookings reaching up to $290/mt CFR. Container freight rates from the US West Coast to Far East ports currently stand at $25-$30/mt. Steel prices are on the move in Asia and therefore leaves a little more room for Asian mills to pay more than the Turkish buyers.
The Indian market has also been active recently, with bookings reaching $300/mt CFR HMS I for containerized cargo.
The US export market will continue to be the driving force behind the US scrap market movement for the near future as domestic demand remains relatively weak. However, despite the dismal economic conditions, the general view is that things are close to bottoming out and June may be a stronger month for scrap purchases by domestic steel producers.