Players within the US export scrap market are battening down the hatches, with many saying they’re expecting a “very ugly first quarter” when it comes to sales and pricing. The most recent ex-US scrap booking took place out of Houston at $310/mt CFR, reflecting a week-on-week decline of $3-$4/mt CFR. Dealers throughout the US are also talking about an ex-UK booking to Turkey for a cargo of HMS 80:20, that transacted at $275/mt CFR, although the general suspicion is that the transaction was a “distressed sale.”
“I think we’re going to see more of those as the first quarter moves on,” according to one East Coast-based source. Chinese iron ore is cheap and transacting at levels that haven’t been seen since May of 2009. Turkish finished steel prices are also falling, which has producers holding their line in terms of scrap pricing. “The next 60 days are going to be pretty bloody,” according to another source, “because at this point there really isn’t any clarity. A lot of people have already written off February and are already looking to March.”
The outlook within the US domestic market is also trending bleak, with rumors that February could settle down anywhere from $30/lt to $50/lt depending on the region; weak US prices would make it less likely for exporters to turn their shipments inland.