Scrap export market firms, May domestic settlement still in flux

The export market on the North American East Coast has been firming after seeing a sale that climbed to $415.50 per metric ton (mt) CFR for HMS 85/15.

That sale, which concluded late last week, was equivalent to $412/mt for HMS 80/20. Since then, there have been no further reported bookings from North America.

In Europe, a German cargo was purchased at $408/mt, which is a fairly bullish price considering the freight differential.

Turkish buyers are trying to resist higher prices, but high freight costs are proving difficult to overcome. The rates off the US East Coast have stubbornly remained in the mid-$40s/mt. Despite efforts by deep-sea buyers to limit the market participation, tight supply and increased demand in the US and Canada have kept those domestic markets firm.

Regarding the US domestic market, it has started to settle but is only in the initial stages. There has been a rumored mill buy in a Northern district where obsolescent grades went sideways and prime scrap rose $20 per gross ton (gt).

Most buyers and seller agree that shredded, P&S, and HMS will trade sideways from April pricing. However, there seems to be disagreement about the May price of prime grades like #1 busheling and bundles. Some mills want to buy sideways while others are attempting to go up less than $20/gt.

Whenever things do settle, the worst-case scenario for scrap sellers appears to be a sideways domestic market for May.

This is not good news for foreign scrap buyers, like Turkey, that want to receive American material. Mills in other countries – like Mexico, Italy and Egypt – are also interested in US and Canadian scrap. In general, export prices are firm. The futures market indicates this as well, with prices at present expected to rise throughout the year.

Stephen Miller

Stephen Miller started his career in the scrap metal industry in 1978 at Luria Brothers in Cleveland. Over the last 40-plus years, he has worked in all capacities in the trading business. He has had positions in both domestic and international scrap trading. In addition to scrap, Miller was at the forefront of the pig iron trade and established a pig iron distribution company under the name of Ferrosource, Inc. Most recently, Miller has concentrated on the scrap export market and regularly does consulting for several companies in the industry.