Sources close to SteelOrbis note that trading activity in both US coasts have slowed down during the past week due to several factors including Turkey’s withdraw from deep-sea scrap purchases, India’s demonetization effect, decreased demand from Taiwan, a stronger dollar and recent Chinese futures fluctuations that are adding to market uncertainty.
Container price offers off the East Coast are down $10/mt from the height recorded in mid-November and are presently $270-275/mt CFR Turkey for HMS I/II 80:20, $275-280/mt CFR Turkey for bulk shredded, and $270-280/mt CFR Nhava Sheva for containerized shredded. One source close to SteelOrbis noted that the tight domestic scrap supply, increased freight costs to Turkey, and expectations of increasing raw material prices globally limit lower ex-US scrap offers to Turkey in the immediate future. Though sources acknowledge pressure as recent scrap deals from St. Petersburg and EU have lowered import prices to Turkey for HMS I/II 80:20 to $262-265/mt CFR.
Additionally, the Thanksgiving holiday November 24 and 25 delayed the majority of scrap deals until next week. Several sources expressed relief at the break as they expect more market clarity, and therefore, export market activity next week.
Over the past two weeks, export firms have been busy loading cargoes that prompted them to increase their scrap purchasing prices at the docks. East coast exporters, for example, paid as much as $10/mt more for export HMS I/II 80:20 than nearby mills paid for HMS I during the November buy cycle. Hitting the $198-208/mt ($195-205/gt) price was necessary to attract supply to fulfill cargo commitments in the midst of tight supply concerns. At the moment, US domestic scrap prices are expected to increase $20-30/mt in the December buy cycle.
According to sources close to SteelOrbis, barring a drastic market event, US prices for export on the East coast are expected to remain relatively steady through the end of December 2016. On the West coast, Taiwan’s reduction of domestic scrap prices has softened offers to $240/mt CFR Taiwan but the expectations for further price surges in raw materials and scrap alternatives may limit the willingness of exporters to discount deals within December.