Ferrous scrap prices to the US East Coast (USEC) docks dropped by $10/gt this week in New York and Philadelphia after there were announcements by exporters late last week of price decreases for the same amount. Boston prices have remained the same, according to contacts in the area, but exporters there have started to talk about incoming drops very soon. Expectations in that market are for prices to decrease by $10/gt by the end of this week or the beginning of next.
Nevertheless, some Boston contacts reported already seeing price cuts from some exporters in New England, particularly in Connecticut, while leaving shredder feed unchanged for now. In Boston, prices for HMS I remain in the $260-265/gt delivered export yard range, while for P&S 5ft they are flat at $270-275/gt delivered. Shredder feed is at $170-175/gt delivered.
Late last week, as some exporters in USEC made their downward announcements, it remained to be seen whether the rest would follow. Participants report that some did, yet some are still pending. Exporters have not been explicit, but they could be looking at the slightly softer environment in the export market to Turkey. The latest deal to have surfaced, an ex-UK cargo for HMS I/II 80:20 sold at $406/mt CFR Turkey, would lower the price for its US counterpart by a couple of dollars to approximately $411/mt CFR Turkey.
The softness in the Turkish import market stems from rising energy costs, expected to arrive in June. The increases are due to the disruptions caused by the US-Israel-Iran war. There have not been any updated bids for US material, but some contacts have ventured out to say that it would not surprise them to see bids for US-origin HMS I/II 80:20 dip in the coming weeks.
In New York and Philadelphia, the price of HMS I contracted by $10/gt to $270-280/gt delivered export yard, P&S 5ft dropped by the same amount to $295-305/gt delivered, and shredder feed fell by $10/gt to $240-250/gt delivered.
Expectations for the domestic market also softened slightly after Memorial Day weekend, as some contacts returned to the office and spoke of a possible downgrade in June scrap prices. Some of the reasons stated are that steel demand is starting to slow as summer approaches, and that this will lead mills to maintain margins and be more careful with their scrap inventory management. This could lead to some decreases in scrap prices, according to them. They also mention some mills have announced smaller scrap buys in June, and other mills could use this to exert downward pressure.
Others mention that trading is still some 14 days away, and the last reported installed capacity utilization rate for the steel sector by the American Iron and Steel Institute (Monday’s report has been delayed because of the holiday) still stands at 82.2 percent, a rate not seen in years.
