US scrap prices are heading up again in March after the downward price correction of approximately $10 /long ton (lt) seen in February.
Followed by auto bundle prices rising at least $10 /lt in the beginning of March, busheling and shredded scrap prices have gone up approximately $20 /lt since then.
Scrap prices are on the rise because of the strong demand from both the domestic market and export market, along with short supplies due to less scrap imports (thanks to the weak US dollar) and the lack of scrap collected in the winter months. In addition, scrap dealers want their prices to reflect the recent increase in worldwide iron ore contract prices.
Current Midwest busheling scrap prices are in the range of $415 /lt to $425 /lt, and shredded scrap is sold for $400 /lt to $410 /lt, while HMS I ranges from $345 /lt to $355 /lt. While many expect scrap prices to rise again in April, scrap dealers are still uncertain of the trend, so they are keeping their inventories at a minimum.
The weak US dollar continues to facilitate the export market. SteelOrbis has been informed that last week a Turkish mill concluded a scrap booking ex-US for April shipment. The cargo is composed of HMS I/II 80:20 scrap booked at $523 /mt CIF Nemrut, shredded scrap booked at $528 /mt CIF Nemrut and P&S scrap booked at $533 /mt CIF Nemrut. Prices increased significantly at approximately $85 /mt since mid-February. Ocean freight rates to Turkey remain in the low $70's /mt.
American scrap is getting a nice premium from the export markets and, therefore, it is highly possible that the domestic numbers could go up again in April to correct the big gap between the domestic and export prices.
The most recent USITC data available show that during the month of January 2008, the top recipients of shredded scrap from the US were: Taiwan, at 96,000 mt; Mexico, at 67,000 mt; Thailand, at 65,000 mt; Turkey, at 60,000 mt; and Egypt, at 46,000 mt. Greece, Malaysia, China, India, Italy and Pakistan also imported some tonnage of shredded scrap from the US in January.
The top recipients of HMS I grade scrap from the US in January 2008 were: Turkey, at 162,000 mt; Malaysia, at 29,000 mt; Taiwan, at 26,000 mt; and Egypt, at 24,000 mt. Some other countries which imported HMS 1 grade scrap from the US in January include South Korea and Greece.