The US scrap export market continues to trend slightly down due to the lack of steel production resulting from the slow finished product markets throughout the world. However, an up-tick in demand from Asia has kept US export scrap prices afloat, driving one major buyer to explore the alternative.
China's tendency to come in and out of the market rather sporadically makes it no surprise to many that China has been absent from the US market as of late. A few weeks ago, China bought quite a few West Coast cargoes at about $290/mt CFR level, but they have been very quiet in the last several weeks. With the export flurry running out of gas and China not buying anymore, prices have retreated somewhat. However, industry sources have seen some increased activity from Vietnam and Taiwan lately at rates ranging from $235 to $245/mt CFR for HMS I/II. Still, this increase of activity is thought to be temporary as their respective industries are not large enough to sufficiently sustain the levels of tonnage being booked.
The Turkish market is not faring any better. Turkish mills are suffering from lack of orders and, rather than buying scrap at the going rates, many of the Turkish mills have recently opted instead to buy distressed billets and convert them to end products like wire rod and rebars. However, it is believed that a recently reported CIS billet purchase was sold at below a fair value; therefore, sustained billet sales to Turkey from the CIS are not anticipated. For now, scrap inventories of Turkish mills remain relatively low.
For the foreseeable future, the local and export US scrap market will be sluggish, although there is a good chance of an export-driven bounce in April, when foreign mills will likely return to the market to replenish their inventories.