After dropping by $10 to $20/long ton ($9.84 to $19.68/mt) at the beginning of October, US domestic scrap prices have come down by another $10 to $20/lt the second week of the month.
Both busheling and HMS I scrap prices have decreased by another $10/lt within the last week, while shredded scrap prices have dropped by another $20/lt. Overall, when compared to September prices, the total price decrease in October so far for US busheling scrap is approximately $30/lt ($29.53/mt); the drop for shredded scrap is around $35/lt ($34.45/mt), and the decline in HMS I prices totals about $20/lt ($19.68/mt). Currently, on the US East Coast, domestic busheling scrap prices are at $295 to $305/lt ($290 to $300/mt); shredded scrap is at $255 to $265/lt ($251 to $261/mt); and HMS I ranges from $240 to $250/lt ($236 to $246/mt).
With the softening finished product markets, slowing scrap export activity, and the sluggish economy in general, US steel producers continue to refrain from purchasing scrap and are trying to keep their inventories to a minimum as the end of the year approaches. As a result, there is hardly any buying activity seen in the market. Domestic mills have already bought what they needed to increase flat rolled production in the last few months, and with flat rolled starting to weaken in recent weeks, it is expected that mills will wait to resume major scrap buying activities until January.
Given the abovementioned market situation, the US domestic scrap market is generally expected to remain slow for the rest of the year, and to possibly undergo another slight price decrease in November.
On the export side, the market remains weak and prices keep trending down as Turkey and China remain quiet. Still, some US scrap exporters are hopeful that there will be a pick-up in export buying activity in mid-to-late-November.
The latest USITC data shows that the total amount of ferrous scrap exports from the US in August 2009 was 1,829,000 mt, representing an increase of 553,000 mt when compared to the figure of 1,276,000 mt in July. However, US scrap buying activities from the two leading importers of ex-US scrap, Turkey and China, have been very quiet since mid-September, and the data for September and October are expected to be well under August levels.
The main recipients of shredded scrap from the US in August were: China, at 357,000 mt; Turkey, at 169,000 mt; South Korea and Taiwan, at 85,000 mt each; Thailand, at 41,000 mt; Mexico, at 37,000 mt; and India, at 32,000 mt. Countries that imported smaller amounts of shredded scrap from the US during the month include Egypt and Malaysia.
For HMS I grade scrap, the top recipients of US exports in August were: Turkey, at 162,000 mt; South Korea, at 144,000 mt; China, at 87,000 mt; Taiwan, at 85,000 mt; Malaysia, at 45,000; and Egypt, at 37,000. Mexico and India also imported some tonnage of HMS I grade scrap from the US during the period.