US scrap market improves in December

Domestic scrap prices have gone up this month, with demand increasing due to the strong overseas market. Current scrap inventories are low, though domestic demand for scrap is not robust, as steel production has decreased in the fourth quarter. Most scrap suppliers are anticipating better prices next year - insiders predict that domestic prices will go up by $10 - $20 / long ton in January when demand becomes greater than supplies. Overseas demand, especially from Turkey, plays an important role in the US scrap market, and the current strong demand will help to constrain US supplies and improve the state of the scrap market next year. Scrap prices have been climbing up since the end of November. Busheling scrap has increased an average of $15 /long ton. Shredded scrap has also increased an average $10 /long ton. HMS I and II have gone up at an average of $8 /long ton. Busheling prices now range from $230 - $240 /long ton, while shredded goes for $225 - $235 /long ton. HMS I ranges from $200 /long ton to $210 /long ton, while HMS II ranges from $195 /long ton to $205 /long ton. The US scrap market will pick up by late February. Imports may slow down a little bit in the first quarter, but global demand for scrap will continue to be strong. As for the export market, demand from importing countries is high. Turkey, Korea, Egypt, Mexico and China have all registered strong buying activity. The current East Coast FOB ship prices for shredded scrap range from $239 - $249 /mt while HMS I is going for $235 - $245 /mt. The pricing trend for scrap exports is rising - experts predict these prices will be $10 to $15 /mt higher in the first quarter. The weakening of the US dollar against the Euro is one of the factors contributing to the strong US export market. There is more interest in buying scrap now, as suppliers in foreign countries are enjoying the low prices in the US. The weak US dollar is working for scrap exports while steel imports are becoming more expensive. Pricing for completed offers of US scrap to Turkey have increased slightly from last month. SteelOrbis has been informed that a Turkish mill concluded a booking of 35,000 mt of scrap cargo ex-US at $282.50 /mt CFR Marmara for January shipment. 12,000 mt of the cargo is composed of shredded scrap, while the remaining 23,000 mt is HMS I/II 80:20 scrap. Last month, a similar offer was completed for $278.50 /mt CFR. The most recent United States International Trade Commission (USITC) data available show that during the month of October, the top recipients of shredded scrap from the US were: Turkey at 138,000 mt, Mexico at 43,000 mt, Peru at 32,000 mt and Indonesia at 31,000 mt. Some other major importers included Greece and Malaysia. Turkey is still the top importer, with 68,000 mt in September, and double that in October. Peru and Indonesia saw big jumps in October, but neither country imported any shredded scrap tonnage from the US in September. However, Taiwan, the third top importer in September, at 34,000 mt, imported only 1,000 mt in October. The top importers of HMS 1 grade scrap from the US in October were: Turkey at 123,000 mt, Malaysia at 22,000 mt, and Korea at 17,000 mt. Taiwan, which imported 33,000 mt from US in September, only imported 9,000 mt in October. Another major importer in September was Egypt, at 25,000 mt, though it did not import any HMS 1 grade scrap tonnage from the US in October. On the contrary, Korea, did not import any HMS 1 grade scrap tonnage from the US in September, though it became one of the major import countries from the US in October.