Bulk scrap prices for the export market in the US West Coast (USWC) remained unchanged for another week, yet contacts expect drops to come into effect as soon as next week due to a soft Asian scrap import market. In the meantime, containerized scrap prices in the USWC continue to fall, and the downward trend is not expected to stop any time soon.
Contacts report that scrap flows west of the Mississippi River have remained adequate, which has enabled exporters to drop the prices of bulk scrap to the docks. In Los Angeles (L.A.), the price of HMS I remains at $250-260/gt delivered export yard, P&S 5ft at $270/gt delivered, and shredder feed at $200-210/gt delivered. San Francisco Bay Area bulk scrap prices to docks remain at $5/gt below L.A. levels.
While the export market in the USWC has softened in the past weeks due to a sluggish Asian import market, contacts this week expressed frustration that US mills have not made an effort to improve domestic prices, which could help the situation at the docks. They mention that mills are enjoying generous profits without sharing the wealth. Nevertheless, some note that mills would not be willing to jeopardize their profits by failing to secure enough scrap, which should encourage sellers to adopt more aggressive positions in negotiations. Scrap processors in the US have mentioned that their costs have been increasing, affecting their margins.
In Houston, bulk scrap prices to docks also remained unchanged, yet some contacts in the region mention that drops are “lurking”, due to the softness on both coasts of the country. HMS I remains at $340-345/gt delivered export yard, P&S 5ft at $350-360/gt delivered, and shredder feed at $310-330/gt delivered.
Containerized
Prices for containerized scrap in the USWC fell for the fifth consecutive week as the Asian import scrap market has shown tempered demand. The price of HMS I/II 80:20 fell to $325-328/mt FAS Long Beach port from $330/mt FAS last week, the price of P&S 5ft decreased by $5/mt to $340-345/mt FAS, and shredded fell to $345-363/mt FAS from $350-355/mt FAS last week. San Francisco Bay Area prices also fell accordingly, with HMS I/II 80:20 settling at $320-323/mt FAS Oakland port from $335/mt FAS last week, P&S 5ft dropped by $5/mt to $335-330/mt FAS port, and shredded settled at $340-358/mt FAS from $345-350/mt FAS last week.
In Asia, each country has its own host of issues softening scrap demand, but some of the recurring factors are the rainy season affecting construction activity and hence rebar demand, and higher energy costs. As reported by SteelOrbis, in Pakistan, for example, buyers are making required purchases ahead of the Ashura holiday. The price of ex-UK/EU shredded scrap fell this week to $413/mt CFR Qasim from $415-417/mt CFR the previous week. And more drops are expected by contacts after the holidays. Last week, containerized scrap offers for HMS I/II 80:20 from the US into Taiwan fell to $352/mt CFR from $353-357/mt CFR in the previous week.
The opening of the Strait of Hormuz, at least for a temporary period during ongoing negotiations, could ease some costs like insurance and freight costs, yet some sources report that those positive factors could have a delayed effect on the Asian scrap market.
