Turkish producers have maintained a steady diet of imported scrap through mid-June with as many as 20 cargoes coming from off-shore suppliers this month.
Recent transaction prices out of the US East Coast are reported at $261.50/mt CFR for HMS I/II 80:20, up from $250 /mt from two weeks ago. Other grades are reported $266.50/mt CFR for shredded, and $271.50/mt CFR for P&S. It is expected that demand from Turkish producers will remain consistent into the near future as low inventories and an price increases in the region's finished markets will require sustained raw material purchases. Pressure as a result of relatively steady scrap demand from the Far East, which is allowing suppliers to maintain their current rates, is also luring Turkish producers back into the international scrap market.
Demand from the Far East has been stable in recent weeks, particularly from Vietnam and Thailand, which are accepting rates of $270/mt CFR for HMS I/II 80:20 by container, while container bookings to China and Korea have been comparatively lower with rates at $265/mt CFR Chinese ports for shredded (or $285/mt CFR Chinese ports for shredded bulk).
A concern moving forward, according to one US supplier, is the increase in container inspections at Chinese ports due to misclassification by suppliers. "They are opening up every container that comes through," a US supplier recently told SteelOrbis. These inspections have effectively put a bottleneck in the scrap supply chain to China.
Meanwhile, demand for ex-US scrap from India has slowed in recent weeks, with Indian buyers asking for lower prices now of about $245 to $250/mt CFR for HMS I/II 80:20.
Even so, demand from other regions and an anticipated increase in container freight rates as of July 1 should keep ex-US scrap transaction prices from falling in most regions. Furthermore, early indications point to an improvement in demand for ex-US scrap to the Far East in July.
With the expectation that US mills will have an increase in demand in the coming months and domestic supply remaining at relatively low levels, a domestic price spike should be realized in the near future. The upward trend in some of the US finished product markets is also affecting exports as smaller domestic scrap suppliers are holding onto their inventories with the anticipation that the return of their domestic mill customers will come with a promising price increase and more consumption of scrap in general.