Recent upticks in scrap demand by Turkish steelmakers has led to firming in US export scrap prices. Two weeks ago, cargos were transacted in the ranges of $262-$265/mt CFR for HMS I/II 80:20, $263/mt CFR for shredded scrap and $268/mt CFR for bonus grade scrap. Market sources say there was a flurry of activity that took place last week, with several deals being transacted out of the Europe, Black Sea and US. The bookings indicate an uptrend in transaction pricing, as the most recent ex-US cargo of HMS I/II 80:20 was booked at approximately $269/mt CFR.
The reasons for this, according to East Coast-based sources, may be twofold. First, an increase in Turkish finished steel demand translates to an increase in scrap demand, and increased demand is generally linked to higher prices. Second, many speculate that the “wells of cheap scrap” out of the UK and Baltic regions may have dried up, which would bode well for those US export scrap yards, who would like to see prices continue to firm, but will settle for sideways.
In terms of inflow into the yards, “that seems to be picking up now that yards are starting to pay slightly higher prices to collectors,” according to other sources, who say they’ll be happy when they have a more solid grasp as to what the “new normal” will look like because for now, the dust still seems to be settling.