After an approximate $10 to $15 /long ton hike at the beginning of August, US scrap prices increased again at the beginning of September, by roughly $10 to $20 /long ton.
Scrap prices have been increasing since August due to the strengthening demand from domestic mills and the resumption of export activity. Scrap yards are now focusing on collection in efforts to replenish inventories.
Current East Coast busheling scrap is going for $315 to $325 /long ton, shredded scrap is going for $290 to $300 /long ton, while HMS I ranges from $270 to $280 /long ton.
Some insiders believe that scrap prices are pretty firm now and will stay at around the same level next month. Nevertheless, as Nucor announced price increases on finished steel products this week, it is possible that scrap prices will go up again in October, with some insiders expecting a modest increase of about $10 /long ton at the most. For this reason, US scrap prices are trending slightly up.
As for scrap exports from the US, ocean freight rates remain high and are still trending upwards. Correspondingly, delivered export prices have increased some since the beginning of September to reflect the freight rate increases, though they might have softened some on an FOB US East Coast basis.
Recent HMS I/II 80:20 offers ex-US remain at $340 /mt to $345/mt CFR Turkey. The rebar market in Turkey has started to register some sharp decreases, perhaps due to Ramadan, so Turkish mills are delaying their scrap purchases for now. Nevertheless, it is expected they will come back to buy at the end of September or at the beginning of October for October/November shipments.
The most recent USITC data available show that during the month of July 2007, the top recipients of shredded scrap from the US were: Turkey, at 89,000 mt; Pakistan, at 78,000 mt; Thailand, at 68,000 mt; and Mexico at 65,000 mt. Malaysia, Japan, Taiwan, South Korea and India also imported some tonnage of shredded scrap from the US in July.
The top importers of HMS 1 grade scrap from the US in July 2007 were: Turkey, at 110,000 mt; South Korea, at 80,000 mt; and Malaysia, at 48,000 mt. Some other countries which imported HMS 1 grade scrap from the US in July include: Mexico, Taiwan and Thailand.
The total amount of ferrous scrap exports from the US in July 2007 totaled 983,000 mt - 43,000 mt more than the amount exported in June. Year-to-date (January to July 2007), the total amount of ferrous scrap exports is 6,313,000 mt - an increase of 23.9 percent when compared to the figure of 5,097,000 mt for the corresponding period of 2006.