The long awaited scrap deal to Turkey shocked the market as prices decreased further than initially expected. According to market sources, the most recent US origin scrap deal to Turkey reported this week was for 26,000 mt of HMS I/II 80:20 scrap at $282/mt CFR and 16,000 mt of shredded scrap at $287/mt CFR. This was the first deal for US origin scrap to Turkey since mid-December when HMS I/II 80:20 sold at $296/mt. According to a market source, "While US exporters were feeling the pressure as Turkey was buying from the EU and Baltics, we were hoping for a $6-8/mt decline from the previous $296/mt deal. The $14/mt drop was more than many expected."
US East coast export scrap prices had to move down due to the limited sales of not only HMS I/II 80:20 but also shredded scrap. US origin containerized shredded scrap sales to India have been silent and Indian traders have adopted a wait-and-see approach for the last two months due to a weak domestic market, which is still recovering, post the demonetization effect and finding US origin containerized shredded too expensive. Some containerized shredded sales to Bangladesh were heard in early January at $285-290/mt CFR but the volumes were low.
US HMS I/II 80:20 is currently being heard at $264/mt FOB East coast while containerized shredded prices are being heard at $270-275/mt FOB East coast.
Taiwan is having a slight recovery as mills seek to secure deals ahead of the Chinese New Year. US West coast prices for HMS I/II 80:20 creeped up slightly, while ex-US HMS I/II 80:20 scrap offers to Taiwan are now at $255-257/mt CFR. As a few Japanese scrap suppliers have been heard lowering their offers to Taiwan buyers after purchase price cut announcements on scrap were recently made by two major South Korean steelmakers, US West coast prices may receive some downward pressure on sales to Taiwan.
No new US origin deals have been heard to South Korea in the last week. The most recent ex-US deal reported by SteelOrbis on January 16 was for 40,000/mt of HMS I for $279/mt CFR South Korea. According to market sources, this South Korean deal was 'soft sideways' compared to deals in the last month, which had moved up $8-10/mt to the early $280's/mt from deals in early December that sold for $272/mt.