Ferrous scrap prices to the US East Coast docks softened slightly on Tuesday as the higher end of the price ranges decreased. The market remains bearish amid a weak export market to Turkey, and contacts at the docks expect prices to continue decreasing for next week. Shredder feed, after falling by $30/gt last week, contracted slightly and is on par with cut grades at the docks this week. Contacts at USEC docks mention that the closure of some shredders has already had its main impact on the grade.
The cost of ocean bulk freight from USEC is still at $44-47/mt CFR Turkey as of this past Friday, with no noticeable decrease yet as the uncertainty surrounding the US-Israel-Iran war seems to have entered a lull while parties negotiate. In the meantime, the Strait of Ormuz has been open. In Q1, it took about a month for the price of bulk freight to increase beyond usual levels. While the war began on Feb 28, it was not until the end of March when it rose to $44-49/mt CFR Turkey from the normal level of $44-45/mt CFR (some claim the normal level is actually below $40/mt CFR). The cost has remained at the current level for at least two months.
In the meantime, the price of HMS I to New York and Philadelphia docks fell to $270-280/gt delivered export yard from $270-290/gt delivered last week. P&S 5ft fell on the higher end to $290-300/gt delivered from $290-310/gt delivered last week. Shredder feed followed a similar trend, contracting by $5/gt on the higher end deals to $220-225/gt delivered from $220-230/gt delivered last week.
USEC contacts are not sure if the export market to Turkey will remain sluggish, but they are expecting the soft trend to last through the summer months at least, from July through August. The US domestic ferrous scrap prices could provide some upward pressure as finished steel prices continue to improve, and scrap flows usually decrease in the summer on account of the hot weather. On Monday, some steelmakers announced another $5/nt increase to the price of their hot-rolled coil, as it climbed to $1,130/nt ex-US Midwest mill. Cut grades are expected to remain sideways for July (most of the positive sentiment is reserved for prime grades), yet USEC exporters could look to be more competitive with their buying prices amid a strong domestic market if they wish to secure tonnages. July domestic trading is expected to begin after the Jul 4 Independence Day holiday.
Boston prices to the docks were unchanged for cuts yet softened slightly for shredder feed. The price of HMS I remained at $245-250/gt delivered export yard, while for P&S 5ft it stayed at $255-265/gt delivered. Shredder feed softened slightly to $160-165/gt delivered from $165/gt delivered last week.
Deals to Turkey have been relatively scarce, yet some deals ex-USEC are expected soon. The finished steel market in Turkey has been facing sluggish demand due to higher interest rates and political uncertainty. Moreover, construction activity and higher rebar demand that was bolstered by the reconstruction efforts after the February 6, 2023, earthquake are almost complete, adding more downward pressure to the finished steel market. The latest deals from the EU, including one seen yesterday, place the US-equivalent of HMS I/II 80:20 price at $388/mt CFR Turkey.
Containerized
On the other hand, prices for containerized scrap from USEC have remained stable for another week, with the price of HMS I/II 80:20 at $325-335/mt FAS New York port, P&S 5ft at $345-350/mt FAS port, and shredded at $350-360/mt FAS port. The USEC containerized market has benefited from a somewhat more robust Asian scrap import market. Although markets in Asia have been softening on account of the rainy season impacting construction activity and rebar demand, and higher energy costs.
