As US East Coast scrap exporters scramble to locate material to fill previously booked orders as new transactions come in, West Coast suppliers are fighting to get increased transaction prices accepted by their Far Eastern customers.
As of late, US East Coast export yards have been reaching inland to fill gaps in inventory sold in previous transactions. The US East Coast has felt a tightening in supply over the recessional/recovery period, more so than their counter parts on the US West Coast. The supply shortage is believed by some, to be a result of lowered demolition activity which makes up a substantial amount of the regions scrap supplies. According to one US scrap supplier, "We are seeing a steady trend of tight scrap supplies on the US East Coast from Charleston and up through New York, while US Southern and Western scrap suppliers are in a much better supply position." US East Coast suppliers have had to rely on demolition/construction as a main source for scrap supplies while demolition material is mostly a second hand source for other parts of the country.
As previously mentioned, the allocation of inland scrap by US suppliers on the East Coast is being used to fulfill orders lager in part to Turkish producers, who went on a buying spree pre-Ramadan and have since returned to the international scrap market on the back of a strong domestic finished goods market. Current rates for ex-US material to Turkey have been heard at $395/mt CFR HMS I/II 80:20.
While scrap supplies might have a better outlook at US West Coast yards, suppliers are finding it difficult to get transactions completed at the current high offer rate. Current rates for ex-US containerized material has been offered at $405-$410/mt CFR HMS I/II 80:20 Taiwan, with transaction prices falling back to $395-$400/mt CFR and $38-$40/mt container freight from the US West Coast. According to sources, Far Eastern activity has begun to slow as slack is felt in regional domestic finished markets as well as anticipations of further US domestic scrap increases are rumored.
An increase of $30-$40/lt in the US domestic scrap market is expected come September and US mills are expected to "get the ball rolling" on purchases, ahead of Labor Day. Talks of a mid-month spike in US domestic transactions have also been heard of as US regions affected by winter months acquire sufficient supplies to last through the season.