Two weeks ago, SteelOrbis reported that players within the US export scrap market were already bracing themselves for a “very ugly first quarter”; players within the US domestic market described the situation as being comparable to a runaway train, with the only option being to “step aside, watch the carnage and try to pick up business the best they can once the worst is over.”
Ex-US scrap prices to Turkey have taken quite a tumble since our last report two weeks ago, with the most recent transactions having fallen $15-$18/mt CFR week on week; the most recent bookings for cargos of HMS I/II 80:20 were concluded at $250/mt CFR, with cargos of shredded and bonus grade scrap having concluded at $255/mt CFR and $260/mt CFR, respectively.
World market pressure and cheap Turkish finished steel prices continue to place pressure on the global scrap market and as it stands, ex-US cargo prices for HMS I/II 80:20 have fallen approximately $70/mt CFR since the first of the year. And while some question if scrap prices could fall back to October 2008 levels, when the market was at $130/mt CFR, others are slightly more optimistic. “Back then we were in the middle of a great worldwide recession, and while some countries are not doing as well as they could be, the situation isn’t dire everywhere.” At the same time, the global economy is a “living breathing entity with many moving parts,” he said, “so for now all we can do is sit back, fasten our seatbelts and prepare for what could be a very bumpy ride.”
Other SteelOrbis sources say there is “just too much scrap out there and not enough demand,” and feel that March buys are “very likely” to settle down once again.