As US domestic scrap prices fell $20-$40/lt this month, US suppliers are anticipating that the falling export market has finally bottomed out and will see a return of their international customers.
Turkish buying activity in the US scrap market has yet to pick up in any substantial fashion post Ramadan as many expected. Turkish mills are choosing to instead maintain working inventory levels via EU based materials. It is felt by market sources that Turkish buying activity should pick up in the near term with winter restocking. The latest transaction of ex-US material to Turkey has been reported at $375/mt for a 50/50 mixed cargo of HMS I/II 80:20 and shred.
Far Eastern producers are also anticipated to begin buying in the US market as discrepancies between counter offers narrow. Recent negotiations between a major US supplier and a Taiwanese producer ended in a stalemate with the seller offer price of $350/mt CFR HMS I/II 80:20 and the counter offer of $355/mt being rejected.
As expected, with the recent decreases in the domestic US scrap market, US scrap suppliers in the position to hold material are doing just that. The steep price drop in some US regions are forcing strongly positioned suppliers to hold out for higher prices in the coming months. As winter approaches, and even with soft order books, US mills should feel price pressure from US suppliers and increased export activity. The severity of these factors will determine the US domestic short-term scrap pricing trend.