After a modest increase of $10 /long ton (lt) at the beginning of March, US scrap prices are expected to take an even bigger jump in April.
The combined effects of the low scrap supply, less automotive scrap availability due to less car production, as well as the weak US dollar have led market insiders to believe that US domestic scrap prices will see another significant increase in April, possibly in excess of $50 /lt.
Scrap demand continues to be higher than supply. Domestic mills need scrap for their steel production, while on the export side, foreign buyers, particularly in Turkey, are taking advantage of the weakening US dollar. The strong export market has pushed export prices to a high level and, though prices are increasing in the local market, the gap between domestic and export prices is still widening. Scrap dealers are trying to narrow the gap by raising the domestic prices closer to the export levels.
In March, Midwest busheling scrap prices are in the range of $415 /lt to $425 /lt, and shredded scrap is sold for $400 /lt to $410 /lt, while HMS I ranges from $345 /lt to $355 /lt. However, there is a lot of confusion now as to where the new prices are going to settle.
USITC data show that during 2007 the top recipients of shredded scrap from the US were: Turkey, at 1,298,000 mt; Thailand, at 509,000 mt; India, at 507,000 mt; Mexico, at 495,000 mt; and Malaysia, at 456,000 mt. Taiwan, South Korea, Greece, Egypt and Pakistan also imported some tonnage of shredded scrap from the US in 2007.
The top recipients of HMS I grade scrap from the US in 2007 were: Turkey, at 1,505,000 mt; South Korea, at 480,000 mt; Malaysia, at 345,000 mt; and Taiwan, at 295,000. Some other countries which imported HMS 1 grade scrap from the US in 2007 include Thailand and Egypt.
The total amount of ferrous scrap exports from the US in 2007 was 10,995,000 mt -- an increase of 15.9 percent when compared to the figure of 9,487,000 mt for 2006.
While exports of scrap are increasing, quantities of pig iron imports are trending down. Statistics show that the top countries from which the US imported pig iron in 2007 were: Brazil, at 3,509,160 mt; Russia, at 1,137,181 mt; Ukraine, at 282,360 mt; Canada, at 113,750 mt; and South Africa, at 111,799 mt. The total amount of pig iron that the US imported in 2007 was 5,216,772 mt, which is 1,514,143 mt less than the figure of 6,730,915 mt for 2006.