August was a month of surges in the global steel markets as global prices confidently increased on the back of Chinese supported prices. China’s manufacturing activity expanded at the fastest pace in six months in August, buoyed by a surge in export orders and higher prices, according to the private Caixin manufacturing purchasing manager’s index.
Global prices on billet, rebar, HRC and CRC leaped forward on higher offers and deals. In the week ended September 1, while global prices continue relatively strong, some market corrections have been evident with recent week-on-week stable prices or slight reductions in export offer prices. Additionally, raw material prices in China are trending strong with 62 percent iron ore trading at slightly below $80/mt CFR China while premium hard coking coal has been heard traded at $215-220/mt CFR China. These factors propelled the US scrap export market.
On the West coast and East coast, Turkey purchased shredded scrap at $335/mt CFR in early August. By August 11, deal prices moved up $23/mt. Since then, offers on shredded scrap surged above $370/mt CFR Turkey but have tapered down to $354-364/mt CFR Turkey on lack of new deals; Turkey is on holiday and no deep sea activity is expected for 1-2 weeks.
While exporters have slightly adjusted offers downward from the peak, sources on the East coast inform SteelOrbis that “exporters are still aggressive in buying scrap to fulfill commitments.” A separate East coast contact added the element of caution of higher scrap pricing expectations. He stated, “Sea container scrap prices are under pressure as billet and long steel offer prices do not support higher scrap input costs.” While higher prices are at the moment not expected, neither is a downward spiral. A third source noted the high cost of electrodes, higher steel related metal prices, and strong domestic demand in US, EU, and Asia to support present scrap prices. However, some scrap traders believe that end-user buying may be weakening in some regions due to market uncertainty.
On the West coast, offers to Taiwan on HMS I/II 80:20 scrap are presently heard at $300-310/mt CFR while deals decreased to $295-300/mt CFR from $300-303/mt CFR. According to sources, the new offers reflect a decrease of $5/mt from early in the week which were at $305-315/mt CFR Taiwan. Taiwan mills are reportedly favoring domestic scrap purchases.