US scrap prices had been increasing since December 2009, but the upward pricing trend lost momentum in April.
While many market insiders expected the April domestic scrap prices to go up by as much as $50/long ton ($49.21/mt) at the end of March, the US scrap prices stayed sideways to slightly down in April. Except on the East Coast, where prices went up approximately $30 to 40/lt ($29.53 to $39.37/mt) in early April, the prices retreated last week.
Currently, East Coast prices for busheling are in the level of $460 to $470/lt ($452.74 to $462.58/mt), shredded scrap prices stand at $390 to $400/lt ($383.84 to $393.68/mt), and HMS I prices range between $370 and $380/lt ($364.16 to $374/mt).
With the weather getting warmer across the country, transportation is not currently a problem. Scrap flow is also getting better and scrap collection is easier. Obsolete scrap supply is improving, while industrial scrap supply is still poor, though it is picking up along with the increasing auto production.
On the other hand, there is not much scrap purchasing activity being seen in the market. Domestic mills have a good amount of scrap inventory to cover their needs, so they are not in a hurry to buy for the time being. Also, after the domestic scrap prices kept going up for the last couple months, the market is experiencing a price correction. Market insiders expect the US scrap prices to come down approximately $20 to 30/lt ($19.68 to $29.53/mt) in May, so the domestic mills are holding off purchases and are waiting for the price decrease to come.
The latest USITC data show that the total amount of ferrous scrap exports from the US in February was 1,447,000 mt, reflecting a large increase of 758,000 mt when compared to the figure of 689,000 mt in January 2010.
The main recipients of shredded scrap from the US in February were: China, at 177,000 mt; South Korea, at 134,000 mt; Thailand, at 108,000 mt; India, at 75,000 mt; Turkey, at 66,000 mt; Mexico, at 46,000 mt; Vietnam, at 41,000 mt; and Taiwan, at 26,000 mt. Countries that imported smaller amounts of shredded scrap from US during the month include Malaysia, Canada and Egypt.
For HMS I grade scrap, the top recipients of US exports in February were: South Korea, at 195,000 mt; Turkey, at 80,000 mt; Taiwan, at 46,000 mt; Malaysia, at 42,000 mt; China, at 33,000 mt; and India, at 28,000 mt. Egypt, Vietnam, Mexico and Canada imported some tonnage of HMS I grade scrap from the US during the month as well.