Due to the slow scrap demand from domestic mills, US scrap prices came down $25 to $55/long ton ($24.61 to $54.13/mt) in the beginning of October, depending on grade and region.
Currently, the US scrap market is slow with a lack of demand from the domestic mills due to no significant improvement in the US finished products market yet. As a result, domestic scrap prices have tumbled in October. On the East Coast, October prime grade scrap prices came down approximately $45 to $55/lt ($44.29 to $54.13/mt) and cut grade scrap prices dropped approximately $30 to $40/lt ($29.53 to $39.37/mt) when compared to early September prices. East Coast busheling scrap prices are now in the level of $390 to $400/lt ($383.84 to $393.68/mt), shredded scrap prices are at $335 to $345/lt ($329.71 to $339.55/mt), and HMS I prices are between $310 and $320/lt ($305.10 to $314.95/mt).
With lower domestic scrap prices, some scrap dealers do not have any incentive to sell, which has caused a diminished scrap flow. Although domestic mills are not in a hurry to purchase scrap for the time being, it is expected that they will return to the market to secure some scrap tonnages when winter approaches.
On the other hand, after a quiet month on the scrap export market, some scrap export activities to Turkey were seen in the first week of October; prices were concluded at $370 to $375/mt, which is down approximately $30/mt from a month ago. However, after the Turkish mills replenished for their urgent scrap needs, there were no export transactions concluded since then. Nevertheless, similar to the US market, it is expected that the Turkish mills will soon make scrap bookings to meet their inventory needs for winter.
Therefore, market sources anticipate US scrap prices to go sideways or slightly up next month as long as domestic mills return to secure their scrap inventories and Turkish producers continue to buy a certain amount of scrap from the US.
The latest USITC data show that the total amount of ferrous scrap exports from the US in August was 1,401,000 mt, reflecting an increase of 104,000 mt month-over-month and a decrease of 428,000 mt year-over-year.
The main recipients of shredded scrap form the US in August were: Turkey, at 213,000 mt; Taiwan, at 59,000 mt; China, at 56,000 mt; Pakistan, at 45,000 mt; Mexico, at 43,000 mt; Thailand, at 40,000 mt; South Korea, at 38,000 mt; and Indonesia, at 21,000 mt. Countries that imported smaller amounts of shredded scrap from the US during the month include: Vietnam, Canada, Greece, Malaysia and Egypt.
For HMS I grade scrap, the top recipients of US exports in August were: Turkey, at 193,000 mt; Taiwan, at 128,000 mt; South Korea, at 48,000 mt; China, at 37,000 mt; Peru, at 32,000 mt; Egypt, at 30,000 mt; India, at 29,000 mt; Vietnam, at 27,000 mt; and Malaysia, at 15,000 mt. Indonesia, Canada, and Mexico also imported some tonnages of HMS I grade scrap from the US during the month as well.
As for pig iron, prices have decreased along with scrap. Pig iron prices are at $430 to $440/mt CFR Nola, registering a decrease of approximately $20/mt from a month ago. Pig iron supply is tight, but domestic mills are not interested in buying pig iron at this time. Insiders described the US pig iron market as a thin market currently, yet domestic mills are expected to buy pig iron shortly for the winter months and pig iron prices are projected to go up again in December or January.