Ferrous scrap prices along the US West Coast (USWC) were unchanged this week, both on a bulk towards the docks and containerized FAS port basis, as contacts believe that a possible increase in ocean freight rates thanks to increased uncertainty in the situation surrounding the Strait of Hormuz could tighten exporters' margins. Those exporters now seek to protect their margins even if there have not been reports of higher freight rates from USWC.
A similar situation occurred on the US East Coast (USEC) this week as the market also hit bottom and actually recovered slightly. Amid reports of higher ocean bulk freight rates from USEC, rising to $50/mt CFR Turkey from $44-46/mt CFR the previous week, exporters dug their heels and rejected bids of $370/mt CFR Turkey for HMS I/II 80:20. Sales from USEC actually saw the export price for the grade improve by $6/mt with the latest deals at $375/mt CFR Turkey. The ocean freight rates for USWC usually follow increases in USEC a few days later due to the geographical distance.
In the meantime, this was the first in the past nine weeks where USWC containerized scrap prices did not fall. The price of containerized HMS I/II 80:20 remained at $305/mt FAS Long Beach port, while P&S 5ft trended sideways at $320-325/mt FAS, and shredded at $325-330/mt FAS.
It should be noted that while in USEC the export market has seen a clear improvement, that is still not the case in USWC, there have been no price increases. Some contacts believe there will be stability in the market and price improvements, if any, will not come until Mid-August. They report that supply levels are adequate and that there is no shortage of material for now.
Bulk scrap
It remains to be seen if the decreases in the prices of USWC bulk scrap prices announced a couple of weeks ago will ultimately come into effect as the market turns the corner (or at least stays quiet for now). Two weeks ago, exporters announced that they would be reducing the prices of their inflows by $10-20/gt across the board, yet they have not materialized.
This week, in Southern California, the price of HMS I remained at $240-250/gt delivered Los Angeles export yard, P&S 5ft at $270/gt delivered, and shredder feed at $190-200/gt delivered. In the San Francisco Bay Area, HMS I remained at $250-260/gt delivered, P&S 5ft at $260/gt delivered, and shredder feed at $200/gt delivered.
Houston bulk prices were stable after falling last week. HMS I remained sideways at $320/gt delivered export yard, P&S 5ft at $345/gt delivered, and shredder feed at $320/gt delivered.
