The US domestic scrap market has increased beyond expectations in both November and December buy cycles. Presently, private deals are being rumored at $5-10/mt higher than December closing prices as mills try to secure shredded and busheling into their locations prior to year-end. Mills are being heard reaching further from remote suppliers for January planning which will increase transportation costs.
Looking into the January buy-cycle, scrap is expected to move up. According to sources close to the market, the level of the price increase for the various grades in January will depend on the level of scrap supply tightness. The present sentiment ranges from $10-30/mt up. Scrap supplies in the US are considered tight in all regions, and despite increases in prices to collectors, the domestically sourced supply of scrap is not expected to be sufficient across HMS I, shredded or busheling to ease the tension from the surge in demand.
Some EAFs have already made arrangements for approximately 200,000 mt of imported shredded and busheling to arrive in January. Though with Turkey also looking for deals in the same regions prices in those regions are also firming up. At the moment, after a lull in imported scrap transactions, Turkey was heard making ex-Baltic and ex-Europe deals late into this week but no US deals. The ex-Baltic scrap deal was for $290/mt for HMS I/II 80:20, $295/mt for shredded and $300/mt for P&S.
Offers to Turkey on the East coast have been heard from the high $290s/mt to over $300/mt for HMS I/II 80:20. Any lack of demand from Turkey will allow for exporters to become a domestic source of supply for shredded scrap. If Turkey does close some US origin scrap deals, prices can be expected to surge up further domestically.
US domestic mills are signaling to maintain the higher raw steel production and capacity utilization rates achieved in December into January. According to a source close to SteelOrbis, “Fortunately, the year-end planning, holiday schedule and a few extended plant outages will help scrap yards catch up to the anticipated demand.”
On the West coast, domestic prices are also being supported by export demand. An increased interest from Taiwan, Japan, South Korea and other destinations on limited supply for late January delivery may draw exporters that are presently limiting offers – at higher prices upon their expected return to the market in January.