US East coast export scrap prices may have been on an upswing since our last report two weeks ago, but many export yard sources continue to be skeptical that current, higher price points will hold.
"We all got pretty beat up in the past year and although the exporters want to be optimistic no one is there quite yet," one source said.
The most recent cargos of ex-US HMS I/II 80:20 scrap were both concluded at $229/mt CFR; this is a marked increase from early March, when two ex-US cargos of HMS I/II 80:20 scrap were concluded at $195/mt CFR and 198.50/mt CFR.
SteelOrbis previously reported that Chinese billet offers, which were previously unattractive compared to Turkish import scrap offer prices, had once again become competitive, which had started to cause concern for US East coast export yards. That sentiment, however, has started to change.
Last week's ex-China billet offer prices to Turkish steelmakers were recorded at $300-$310/mt CFR, but this week's billet offer prices to Turkey are now trending in the approximate range of $320-$330/mt CFR, which is comparable to levels reported in our last report two weeks ago, when ex-China billet offer prices were heard at approximately $325/mt CFR.
"There are a lot of questions that still need to be answered," one East coast source noted. "What will happen with iron ore? What will happen with Chinese billet? If billet stays strong this could hang on for a bit longer, but if those prices start to crumble this whole house of cards could come tumbling back down."
Global demand or Turkish finished steel products is also trending weak, sources note, which poses another set of concerns.
In terms of scrap inflow into export yards, sources continue to report that it is "very slow."
"Yes, it's better than it was during the first two months of the year but that's only because the weather, and thus collection efforts, have been more favorable," another source said. "Year-on-year, March 2016 tons will be less than 2015."