US export scrap activity has continued to be quiet over the last couple weeks as Turkish mills refrained from buying much--if any--US scrap as they try to push ex-US East Coast scrap export prices lower. Ex-East Coast scrap offer prices to Turkey have been substantially higher than Turkish mills' expectations so Turkey has been buying up lower-grade and less expensive scrap from other regions. Turkey has purchased HMS I/II scrap cargoes out of Continental Europe for approximately $430-$435/mt delivered and has been trying to push ex-US scrap prices to similar levels. And while ex-US East Coast export scrap offer prices have fallen in the last couple weeks, they are still too high for Turkish mills, according scrap dealer sources. Current offers are approximately $448-$453/mt CFR to Turkey for a mix of HMS and shredded scrap--down about $15-$20/mt in the last two weeks.
On the US West Coast, export scrap activity is also slow due to the Chinese New Year holiday. But scrap inventories are rather low in the Far East so Taiwanese mills are expected to come back to the market next week. Chinese mills believe ex-US scrap prices will soften further and sources tell SteelOrbis that Chinese mills will wait until US export scrap prices appear to have hit bottom before coming back into the market. Most recently, a bulk scrap cargo from the West Coast was sold to Korea at approximately $461/mt CFR, and the newest offers are about $455/mt CFR.
The drop in export prices is anticipated to translate to a similar drop in US domestic shredded and HMS I prices in February, with domestic prices falling $10-$20/lt. Domestic busheling prices are also poised to drop, but by a more significant $20-$30/lt--returning to December levels--due to an abundance of scrap and an overhang of pig iron.