Prices are up in the scrap export market in both the East coast and the West coast. Amid pressure from rising international scrap prices, domestic scrap prices in Turkey, Taiwan, Mexico and other important demand destinations for US scrap have also increased over the week. West coast exporters returned to the market and priced Taiwan deals up $15-20/mt on HMS I/II 80:20 from mid-October deals done prior to temporarily withdrawing supply from the market.
Sources close to SteelOrbis noted that the latest ex-Baltic deal booked by Turkish steelmakers this week was at $235.5/mt CFR and slightly higher rate gives US East coast scrap yards strong hope of attracting additional deals in November.
Additionally, mills have begun announcements of price increases on finished goods in the US and abroad. The price increases in foreign markets are beginning to reflect on increased import tag offers which in turn gives US domestic mills more reason to firm prices up. Furthermore, the rise in coking coal prices, which is expected to continue until late first quarter 2017, is expected to enhance demand for scrap by integrated steel mills.
The higher finished goods prices in the US have yet to receive market acceptance, though, hence, scrap sellers will not be able to increase scrap prices to mills as dramatically. Shredded and prime inventories are plentiful at sellers while HMS is noted to be in tight supply. An East coast scrap dealer close to SteelOrbis commented, "The end of the year is not a good time for a significant increase in finished goods to steel centers. Additionally, Turkish mills may increase offer prices further but they will not all be absorbed by the market. I am hearing the latest higher prices from Turkey for finished goods may not be workable. US offers have also yet to be accepted by the market. All that puts a ceiling on how high scrap can go up in the US."
The additional demand, upward pricing trend globally and tight supply of HMS grades is expected to move the domestic scrap market up $10-20/mt in the November buying cycle next week. HMS scrap grades are expected to move $20/mt while busheling and shredded less due to plentiful supplies.