After bottoming out in November, US
scrap prices bounced back up in December, with busheling and shredded
scrap prices rising approximately $115 /lt, and HMS I increasing approximately $90 /lt from their price levels at the beginning of December.
Market insiders believe
scrap prices rebounded because they were settled at levels that were too low in relation to export prices. Furthermore, US mills typically stock up on
scrap in December, as
scrap collection becomes more difficult in the following winter months. Also, due to
automotive production cutbacks, auto
scrap generation has been scarce. Nevertheless, with the financial crisis and weak finished products market, there was still very little of
scrap buying activity taking place in the first weeks of December.
On the US East Coast, current busheling
scrap prices now range from $255 to $265 /lt. Shredded
scrap is sold for $240 to $250 /lt, while HMS I prices now range from $190 to $200 /lt. In January, market sources expect that
scrap prices won’t increase in a big way, as the demand is still relatively weak. Even if the end product demand picks up in January, it will be a while until the steel producers adjust their
production upwards again.
On the export side, after
scrap prices demonstrated a considerable up-tick in the beginning of November, the export market has slowed down since mid-November, and suppliers are trying to maintain the pricing level at around $260 /mt CFR, though in some cases prices have dipped below that level. Last week, a Turkish producer concluded two ex-US
scrap deals at the following prices: $240 to $245/mt CFR for HMS I/II 80:20; $245 to $250/mt CFR for shredded
scrap and $250 to $255/mt CFR for P&S
scrap. Currently, the Turkish mills are in the middle of the week-long Bayram holiday, and therefore, no buying activity is expected this week.
Year-to-date through September 2008, the total amount of US
scrap exports was 12,989,000 mt, which reflects an increase of 60.9 percent when compared to the figure of 8,071,000 mt in the corresponding period in 2007. However, with the global financial crisis and economic downturn, the latest USITC data show that the total amount of ferrous
scrap exports from the US in September was 1,131,000 mt, representing a decrease of 704,000 mt when compared to the figure of 1,835,000 mt in August.
The top recipients of shredded
scrap from the US in September were:
Turkey, at 368,000 mt;
India, at 85,000 mt;
Malaysia, at 51,000 mt;
China, at 46,000 mt; and
Mexico, at 32,000 mt.
Italy,
Thailand and South
Korea also imported some tonnage of shredded
scrap from the US during the period.
Egypt, which imported 107,000 mt in August, did not import any tonnage of shredded
scrap in September.
As for HMS I grade
scrap, the top recipients from the US in September were:
Turkey, at 106,000 mt; South
Korea, at 59,000 mt;
China, at 37,000 mt; and
Taiwan, at 20,000 mt. Some other countries which imported HMS I grade
scrap from the US in September include
Indonesia,
Canada,
Bangladesh,
Malaysia and
India.