With the tight industrial
scrap supply, busheling
scrap prices have gone up by approximately $70 to $80 /long ton (lt) in June. On the contrary, cut grade
scrap prices have decreased by approximately $20 to $30/ lt this month due to adequate tonnage availability.
Currently, Midwest busheling
scrap prices are in the range of $775 to $785 /lt, though in some regions they are as high as $800 /lt. Shredded
scrap is sold for $550 to $560 /lt, while HMS I ranges from $495 to $505 /lt.
The gap between industrial
scrap and cut grade
scrap prices has widened even further this month; the current price difference between busheling and shredded
scrap is about $225 /lt, whereas the price difference was around $110 /lt in May.
It is expected that industrial
scrap prices will go up again in July because of the usual summer time plant shutdowns as well as the cutback in
production of SUVs and pickup trucks. In addition, the tight
pig iron market and high
pig iron prices, which are at over $950 /mt from
Brazil and
Russia, are leading
pig iron buyers to purchase industrial
scrap instead because of the lower prices. This trend is further tightening the industrial
scrap supply.
Meanwhile, the supplies of shredded
scrap and HMS I have been sufficient to meet the market's demand, and therefore, cut grade
scrap prices have been trending downward.
There has been some confusion in the US
scrap market this month as regards pricing, since the only automaker that held a factory bundles auction with OmniSource this month, Chrysler, had the bidders sign nondisclosure agreements. The monthly factory bundles auction usually gives an indication for where
scrap prices will go, and with the Chrysler factory bundle auction selling prices being unknown, market players were given no clear direction as to where
scrap prices would settle in June. (Due to the sluggish auto industry, the General Motors and Ford Motors are not currently holding any factory bundle auctions.) However, it eventually became apparent that busheling increased by $70 to $80 /lt and shredded came down by $20 to $30 /lt from the previous month.
On the export side, prices are trending sideways to slightly down, as there are adequate materials available in the market, and
scrap buying activity from
Turkey has been quiet in the past three weeks due to pricing uncertainty. SteelOrbis has been informed that a Turkish mill has concluded a booking for a single cargo of
scrap ex-US last week. The cargo is composed of 13,000 mts of HMS I/II 80:20
scrap booked at $723/mt CIF Iskenderun, 10,000 mts of shredded
scrap booked at $728/mt CIF Iskenderun and 2,000 mts of P&S
scrap booked at $733/mt CIF Iskenderun.
Freight rates from US East Coast to
Turkey had reached the level of $100/mt at the end of May.
USITC data show that the top recipients of shredded
scrap from the US in March were:
Taiwan, at 98,000 mt;
Turkey and
Mexico, at 87,000 mt;
Egypt, at 72,000 mt; and South
Korea, at 53,000 mt.
Malaysia,
Peru,
India and
China also imported some tonnage of shredded
scrap from the US during the period.
For HMS I grade
scrap, the top recipients from the US in March were:
Turkey, at 133,000 mt; South
Korea, 80,000 mt; and
Egypt, at 71,000 mt. Some other countries which imported HMS I grade
scrap from the US in March include
Taiwan,
Malaysia,
Mexico and
Thailand.
US
scrap export figures have been increasing since the beginning of the year. The total amount of ferrous
scrap exports from the US in March was 1,214,000 mt, which is an increase of 161,000 mt when compared to the figure of 1,053,000 mt in February.