After significant price increases for two consecutive months, US scrap prices have lost their strong upward momentum due to the slow export scrap market.
Domestic scrap demand is still decent, as US mills have to purchase scrap in order to meet the increasing capacity rate--however, they are not filling up their inventories and just purchasing the tonnage they need. Nevertheless, the US export scrap market is slowing down. Turkey has put a pause on scrap buying from the US and the Chinese New Year is approaching (early February), resulting in a retreat of export scrap prices by about $10/mt.
Waning support from the export market, combined with domestic scrap flow that's not as bad as expected (although poor weather still delays some shipments), US scrap prices have lost their strong upward momentum. It is expected that shredded scrap and HMS I prices to go sideways in February, while busheling scrap prices may still have room to go slightly up, depending on region.
In the beginning of January, East Coast busheling scrap prices were in the level of $510 to $520/lt ($501.95 to $511.79/mt), shredded scrap prices were at $470 to $480/lt ($462.58 to $472.42/mt), and HMS I prices were between $445 to $455/lt ($437.97 to $447.81/mt).
The latest USITC data show that the total amount of ferrous scrap exports from the US in November was 1,628,000 mt, reflecting an increase of 40,000 mt month-over-month and an increase of 257,000 mt for the same period year-over-year.
The main recipients of shredded scrap form the US in November were: China, at 188,000 mt; Turkey, at 186,000 mt; India, at 97,000 mt; Thailand, at 79,000 mt; Taiwan, at 55,000 mt; Egypt, at 42,000 mt; Peru and Italy, at 33,000 mt each; and South Korea and Indonesia, at 20,000 mt each. Countries that imported smaller amounts of shredded scrap from the US during the month include Mexico, Vietnam and Canada.
For HMS I grade scrap, the top recipients of US exports in November were: Turkey, at 206,000 mt; Taiwan, at 92,000 mt; China, at 67,000 mt; South Korea, at 63,000 mt; Egypt, at 51,000 mt; Indonesia, at 44,000 mt; India, at 19,000 mt; and Vietnam, at 18,000 mt. Mexico and Canada also imported some tonnages of HMS I grade scrap from the US during he month as well.
On the other hand, pig iron prices have stayed more or less the same from two weeks ago. Current pig iron prices are at approximately $545/mt CFR Nola. Pig iron supply remains shrink and that allow pig iron prices to stay at high level.