Containerized ferrous scrap prices on the US West Coast (USWC) continued to drop on Wednesday as contacts report that Asian mills continue to push prices down and US suppliers keep accepting them. This trend is expected to continue until suppliers are tight on material and stop accepting lower prices and closing deals. On the domestic front, the Western US is expected to see a $10/gt drop in prices across the board, yet no mills in the region have made any official announcements.
The price of containerized HMS I/II 80:20 fell by $10-15/mt to $310-315/mt FAS Long Beach port, while containerized P&S 5ft dropped by the same margin to $325-335/mt FAS, and containerized shredded to $330-340/mt FAS. Some contacts report seeing HMS I/II 80:20 quoted as low as $305/mt FAS, while others project the price at $295/mt FAS as early as Monday.
The soft trend in the export market has some participants thinking that local mills may start cancelling scrap orders next week and expect a $20-30/gt drop in prices for August. In this scenario, mills could implement their summer maintenance shutdown earlier (causing less domestic scrap demand in the process) seeking lower scrap prices in the later summer months.
A weak import market in many Asian countries continues to depress scrap prices on the USWC. This week, SteelOrbis reported that Pakistani buyers are still under pressure and asking for more discounts, amid uncertainty following the fiscal budget. Reports from last week on the Taiwanese and Vietnamese markets also showed a depressed import market. In the case of Vietnam, domestic mills are still applying downward pressure to the scrap market, lowering USWC offers amid a lack of deals for HMS I/II 80:20 to $385/mt CFR Vietnam from $385-390/mt CFR the week prior. In that case, Japanese sellers have been out of the market out of caution amid volatility of the yen.
Bulk scrap
USWC bulk scrap prices to docks have also suffered the repercussions from the softer Asian import market. Recently, prices fell by $10/gt to the docks following announcements made by exporters two weeks ago of a possible $10-20/gt drop in the coming weeks. There was a minor change, though: P&S 5ft has been reported unchanged until Jul 15, when some exporters expect to fill up a shipment and then implement the $10/gt decrease.
In the meantime, HMS I sits at $240-250/gt delivered Los Angeles (LA) export yard, P&S 5ft at $270/gt delivered but would be at $260/gt delivered after Jul 15, and shredder feed at $190-200/gt delivered. In Northern California, contacts report a price of $250/gt delivered San Francisco Bay Area docks for HMS I, $260/gt delivered for P&S 5ft and $200/gt delivered for shredder feed.
In Houston, contacts mention that docks’ prices are still stable this week as there is not much material available, but they still expect drops to come very soon. HMS I remains at $340-350/gt delivered Houston export yard, P&S 5ft at $350-350/gt delivered, and shredder feed at $310-330/gt delivered. Contacts in the Pacific Northwest (PNW) report a similar situation, with competition from local mills keeping prices relatively buoyant (they did fall $5/gt this week, though), yet some think it has overpriced scrap dock prices in the region slightly, given the continuous drops in other regions. In the PNW, HMS I prices dropped by $5/gt to $285/gt delivered export yard, P&S 5ft fell by the same amount to $295/gt delivered, and shredder feed decreased accordingly to $220-230/gt delivered.
