USEC ferrous scrap prices to the docks remained unchanged on Tuesday as exporters weigh the uncertainty in the market caused by the latest developments in the US-Israel-Iran war. The possibility that ocean bulk freight rates from USEC could rise soon has some exporters waiting for more clarity (it already rose to $50/mt CFR Turkey this week). Moreover, some sources in USEC believe the Turkish import market has reached bottom, adding to the uncertainty that USEC exporters are trying to wait out.
Some exporters were seen rejecting bids of $370/mt CFR Turkey for HMS I/II 80:20 on Monday, infusing the export market with some positive sentiment. Moreover, SteelOrbis has learned that a deal from the US to a Marmara-based producer for HMS I/II 80:20 was conducted at $375/mt CFR , and shredded and P&S at $395/mt CFR.
The cost of ocean bulk freight rose this week to $50/mt CFR Turkey from $44-46/mt CFR Turkey last week, while the cost of West Texas Intermediate (WTI) crude rose to $85 per barrel this week from $74 per barrel one month ago. Apart from fuel costs, vessel availability has also set bulk freight costs. Regarding the tension in the Middle East, the US has renewed its threats to Iran concerning the Strait of Hormuz. This comes after an agreement was reached for a temporary ceasefire while negotiations continued, providing some weeks of relative stability.
In the meantime, the price of HMS I in New York has trended sideways at $250-260/gt delivered export yard, P&S 5ft has been unchanged at $260-270/gt delivered, and shredder feed at $200-205/gt delivered. At the Philadelphia docks, HMS was flat at $245-250/gt delivered, P&S 5ft at $265-270/gt delivered, and shredder feed at $210-215/gt delivered.
Participants in USEC report that even though an exporter’s shredder came back into operation last week after a fire incident caused it to shut down, there has not been a surge in the price of shredder feed, as other exporters in the region were able to stockpile on the grade during the exporter in question’s extended absence. Contacts believe it will be a few weeks before those shredder feed inventories dwindle and exporters actively seek volumes, at which point there could be an increase in the price of the grade.
Boston dock prices fell late last week as they caught up with declines seen in New York and Philadelphia. HMS I fell by $10-15/gt to $230-240/gt delivered Boston export yard, while P&S 5ft fell by the same measure to $240-250/gt delivered. Shredder feed dropped by $10/gt to $140/gt delivered.
Last week, there was still a bearish sentiment in the Turkish import market, even with more deals expected after the Democracy Day holiday on Jul 15. There were rumors of a deal for HMS I/II 90:10 from Houston at $373/mt CFR Turkey, which would place US-origin HMS I/II 80:20 at $368-370/mt CFR Turkey. Turkish steel sales are still tepid, and mills aim to protect their margins by being cautious with their scrap purchases.
