US domestic scrap prices have increased as expected during the January buy-cycle. As the buying for January shipment is still ongoing, sources close to SteelOrbis are reporting prices up $20-30/mt in the East coast and $30-40/mt in the Midwest and Ohio Valley. Though, due to the lack of export demand from Turkey, bulk exporters are being heard offering shredded scrap to the domestic market and dampening the increase anticipated.
As the domestic market settles, the export market outlook is playing an essential role. A market participant on the East coast stated, "We heard that Turkish mills may have a difficulty meeting higher prices as rebar volumes are not moving as expected and price increases in some of their target markets are not being adopted."
Another source close to SteelOrbis commented on the domestic prices, "It first appeared that $340/gt ($345/mt) would be available for shred. Went down to $330-325/gt ($335-330/mt) and is now under $320/gt ($325/mt). Bulk exporters heard offering tons inland today. Rumor has it at $315/gt ($320/mt) delivered. Yes, it is trading up but not at the level that was anticipated. Shredders were already buying based upon what they hoped for on $340/gt ($345/mt) sales." From the main exporters inventory, shredded scrap and higher qualities are the only ones that can be made available inland since HMS I/II 80:20 is not coveted domestically. Shredded pricing on the East coast is expected to settle at $305-310/gt ($310-$315/mt) and higher inland.
A Turkish mill was heard today concluding a deal for an ex-Denmark cargo consisting of HMS I/II 80:20 scrap, shredded scrap and bonus grade scrap at the average price level of $295/mt CFR. The prices of HMS I/II 80:20 scrap in this cargo is $292-293/mt CFR. While the HMS I/II 80:20 price is higher than the $288/mt CFR ex-UK and $290/mt from the Baltics recorded the week of December 19, 2016, several traders are expressing skepticism of maintaining the last ex-US price of $296/mt CFR reported on the same week.
Containerized shredded offers to India continue being heard at $290-295/mt CFR Nhava Sheva but no deals have been heard. Indian buyers are expressing concerns that the scrap price is too high and have placed soft bids at prices $20-30/mt lower.
On the West coast, prices to Taiwan for HMS I/II 80:20 decreased $7/mt from the last deals in December at $260/mt CFR as deals of small cargoes were heard today at $253/mt CFR. A few offers are being heard at $255-260/mt CFR, but the bulk of export pricing from the West coast is expected next week once domestic prices settle.
Domestic prices are expected to settle early next week.