The US domestic scrap prices increased for three months in a row, but are expected to decline during the upcoming February buy-cycle largely influenced by the drastic fall of ex-US export pricing to Turkey though January. The most recent ex-US deal published by SteelOrbis on February 3 is for HMS I/II 80:20 scrap at $240.50/mt CFR and P&S grade scrap at $250.50/mt CFR, which generally remained on par with the last ex-US scrap deals to Turkey in late January.
The price on HMS I/II 80:20 dropped by $41.50/mt from a deal in mid-January which itself was $14/mt lower than the higher ex-US deal in mid-December. This rapid fall in prices along with the more drastic deals to Turkey at $220/mt CFR from the UK and $235/mt CFR from the UK for HMS I/II 80:20, led some to be concerned about whether US scrap export prices would drop further. Several sources accurately expressed, though, that the price correction seemed to have found an equilibrium at the $240/mt level as inquiries from other countries that had been dormant for some time seemed to be increasing.
US scrap exporters have decreased their dock buying prices for heavy melt and are now being heard at $173-183/mt ($170-180/gt) compared to prices ranging from $234-239/mt ($230-235/gt) in mid-January. While this decrease will provide them the capability to retain a decent margin when compared to selling prices, the amount of volume available for purchase is also expected to decrease.
Ex-US offers for containerized shredded to India bounced back and are being heard at $260-270/mt CFR Nhava Sheva. Early in the week due to the pessimistic gloom, a source noted offers of $245-260/mt CFR Nhava Sheva, but also noted that volume could be limited as shredded sold domestically in the US would prove more profitable despite a $40/mt potential decline in the US domestic February buy cycle. The price delivered to mill would still be higher on the East coast at $270-275/mt.
From unknown origins, Indian dealers were heard importing at $290/mt CFR in early January and recently at $260/mt CFR Nhava Sheva. The new ex-US pricing is expected to attract realistic bids from India, Bangladesh, Pakistan and other countries as previous offer prices were considered too high by buyers but too low by sellers.
On the West coast, HMS I/II 80:20 offers are being heard at $240-245/mt CFR Taiwan, a decline of $13/mt from offers published in SteelOrbis on January 24. Recent bids from Taiwanese steelmakers have been heard at $230-235/mt CFR, but the recent Turkey deal is expected to strengthen discussions next week.