After US busheling and shredded scrap increased by $50/lt ($49.21 /mt) in January, US scrap prices are not expected to see another significant price hike in February.
Currently, US busheling scrap prices are at the level of $385 to $395/lt ($379 to $389/mt), shredded scrap prices range from $340 to $350/lt ($335 to $344/mt), and HMS I prices (which rose by $15/lt or $14.76 /mt in January) stand at $295 to $305/lt ($290 to $300/mt) on the US East Coast. In February, market insiders expect that US prime grade scrap prices may go sideways to slightly up while US cut grade scrap prices could go sideways to slightly down with the potential for a $5 to $15/lt ($4.92 to $14.76/mt) price decrease.
Domestic scrap purchasing activity picked up strongly in January, as domestic mills had not made any significant buys in November and December and needed to secure their inventories for the winter months. Furthermore, with the winter storms that have been slamming the East Coast, scrap collection has slowed, and this also contributed to prices rising in January. With US steel production and melting still inching upwards, it is expected that domestic mills will have to buy some scrap next month, though probably not in great quantities.
Meanwhile, Turkey, one of the leading scrap importers from the US, contrary to early expectations, is not much buying scrap from the US this month. Turkish mills purchased heavily from Europe this month leaving some regular US scrap exporters disappointed. The lack of Turkish buying activity from the US has contributed to a slowing overall export scrap market, and for this reason, there is a chance that domestic cut grade scrap prices may not be able to maintain their current level next month.
The latest USITC data shows that the total amount of ferrous scrap exports from the US in November 2009 was 1,371,000 mt, representing an increase of 242,000 mt when compared to the figure of 1,129,000 mt in October.
The main recipients of shredded scrap from the US in November were: China, at 328,000 mt; Turkey, at 74,000 mt; Malaysia, at 62,000 mt; India, at
59,000 mt; Taiwan, at 39,000 mt; Peru, at 31,000 mt; Mexico, at 30,000 mt; and Pakistan, at 28,000 mt. Countries that imported smaller amounts of shredded scrap from US during the month include Egypt, Vietnam, Indonesia, Greece and Singapore.
For HMS I grade scrap, the top recipients of US exports in November were: Turkey, at 123,000 mt; Taiwan, at 89,000 mt; South Korea, at 60,000 mt; China, at 37,000 mt; Malaysia, at 21,000 mt; and Egypt, at 19,000 mt. Vietnam, India, Indonesia, Pakistan, Greece and Mexico also imported some tonnage of HMS I grade scrap from the US during the period.