In early July, US East coast export scrap prices faced downward pressure as Turkey met raw materials needs with ex-EU and ex-Baltic scrap. The first ex-US deals to Turkey completed in early July were priced as follows: HMS I/II 80:20 scrap at $214.5-216/mt, shredded scrap at $221/mt, and Bonus/P&S at $224.5-226/mt, all in CFR terms.
While recent Turkish import scrap deals out of the short sea region for HMS I/II 80:20 were transacted at $205-210/mt CFR, SteelOrbis learned that an ex-US deal to Turkey was booked yesterday for 20,000 HMS I/II 80:20 scrap at $216/mt, 15,000 shredded scrap at $221/mt and $5,000 bonus/P&S at $226/mt, all in CFR terms, thereby, maintaining the initial July pricing. Sources close to SteelOrbis have confirmed that ex-EU and ex-Baltic pricing to Turkey has been firming up for the last several days.
US domestic scrap demand in August is expected to be a reflection of July as mills want to maintain a stable capacity despite the summer slowdown. Therefore, domestic demand is not expected to compete abnormally with the export market.
It should also be noted that while Turkey semi-finished and finished goods continue to face soft domestic and export demand, increases in billet prices over the last week have made billet lose its cost advantage against scrap. This market change increases the expectation that Turkey will continue making steady deep sea purchases of scrap to meet its raw material needs. Specifically, according to sources close to SteelOrbis, US East coast dealers are presently willing sellers and will strive to maintain attractive pricing.
Looking toward August, sources close to SteelOrbis are presently expecting US East coast export scrap pricing to move sideways.