As the month of September draws to a close, the US scrap export market has remained relatively quiet, with no pick-up in activity observed over the past week.
Turkish producers have recently adopted a "wait and see" mentality following a buying-binge consisting of 12 cargoes booked earlier this month. It is thought that Turkish mills will remain on the international sidelines until the status of the US domestic scrap market shapes up for October. US suppliers agree that even though Turkish producers are in need of material, especially rebar producers, a substantial increase in buying activity in the region is not expected until producers are certain of the direction of the US domestic market, or whether orders for Turkish finished products will pick up after the market returns from the month-long Ramadan holiday next week. Current offers of ex-US HMS I/II 80:20 material to Turkey have been heard at $300 to $305/mt CFR, which is down by about $5 to $10/mt from mid-month.
In addition to Turkey, bookings to the Far East have been less frequent as the month has progressed. China and India remain out of the international scrap market as no recent bookings have been made by either region. In China, the domestic scrap market continues to be a more lucrative option for its domestic producers as prices on the international scene remain at higher than desirable levels. Current ex-US rates to China for bulk HMS I have been heard at $350 to $355/mt CFR. In contrast, there has been an increase in ex-US activity to Taiwan, according to one industry source, with bookings for containerized HMS I heard at $320/mt CFR. There are also talks that South Korea may be headed back to the international market based speculation that the US scrap export market may be bottoming out.
International markets are not the only ones trying to decipher the US scrap trend. US suppliers see the US domestic market trending slightly differently from region to region, with overall October US domestic scrap prices trending sideways to slightly down. For cut-grade scrap, it has been heard that prices in the US South/Southwest could see a drop as much as $30/ton and prices in the Northeast may see a narrower decline of about $15/ton. Then again, others expect the overall US scrap market to stay sideways next month or fall by less than $10/ton due to the general tightness of scrap supply amongst US steelmakers. However, much of the October US scrap trend depends on whether the US flat rolled market will be able to maintain its strength over the next two weeks.