Ferrous scrap export activity resumes

Over the last week, there have been five cargoes sold to Turkey from the US East Coast/US Gulf Coast. All the exporters basically received the same price of $345 per metric ton (mt) CFR for HMS 80/20. The component of shredded scrap garnered $365.     

The Europeans were also active with numerous cargoes sold at prices ranging from $336-42 per mt CFR for HMS 80/20.

It is unclear at this time whether this buying trend will continue. The rebar market in Turkey still has not gained very much traction. Also, billets from China and Southeast Asia are still fairly cheap. So, one would think, this market is rangebound and shows life only when Turkey has to restock. 

Some of the increased pricing of US cargoes has been eaten up by increased freight. However, the worst seemed to be over. SMU spoke with an export executive who told us freight dropped significantly last week. He said freights were down $6-7 per mt, “less than $35 for sure. More downside is expected over the next week to 10 days.”

The US domestic market is starting to show some firmness going into July and could improve in August. It would seem that export prices would have to get better to draw more scrap from the US. Either that or freight rates would have to continue to drop. Maybe both.

Before we get ahead of ourselves, the tariff picture still needs fine tuning. The reciprocal tariff suspension will expire on July 8 and it is not at all certain what the effect on the ferrous markets will be, to say the least.