US export scrap prices have remained soft this month, with sluggish demand from Turkey and the Far East.
Although their scrap inventory levels are low, Turkish steel producers have been delaying scrap purchases from the US; the Turkish domestic finished steel market continues to be slow with decreasing prices and thin order books. With weak scrap purchasing activities in the market, export scrap prices from the US East Coast to Turkey have declined by approximately $30/mt from a month ago to the current level of $440/mt CFR.
On the US West Coast, scrap buying demand from the Far East remained quiet over the last couple weeks, and ex-US bulk offer prices to China have come down slightly to around $485/mt CFR, while ex-US container scrap offer prices to Taiwan are at $440 to $450/mt CFR--reflecting a decrease of $10/mt from the low end when compared to two weeks ago. As there are sufficient scrap materials on ground in the domestic Taiwanese market, they are not interested in importing scrap from the US for the time being.
Looking forward, market sources do not see any significant improvement in the US export scrap market and expect that the ex-US scrap prices will go down further in the coming weeks.
The latest data from the USITC indicate that the US exported 2,369,000 mt of ferrous scrap in August--reflecting an increase of 807,000 mt month-over-month and 968,000 mt year-over-year. The month of August registered that Turkey and Taiwan imported the largest amount of scrap tonnages from the US so far this year.
The main recipients of shredded scrap from the US in August were: Turkey, at 283,000 mt; China, at 185,000 mt; India, at 131,000 mt; Taiwan and South Korea, at 86,000 mt each; Thailand, at 51,000 mt; Peru, at 31,000 mt; Italy, at 20,000 mt; Canada, at 18,000 mt; Egypt, at 17,000 mt; and Malaysia and Mexico, at 13,000 each.
For HMS I grade scrap, the top recipients of US exports in August were: Turkey, at 404,000 mt; Taiwan, at 194,000 mt; China, at 151,000 mt; South Korea, at 144,000 mt; Egypt, at 47,000 mt; India, at 29,000; Malaysia and Thailand, at 24,000 each; Vietnam, at 15,000 mt; and Mexico, at 10,000 mt.
As for the US domestic market, scrap prices are expected to go down again in November due to slow domestic scrap demand and weakening export scrap prices.