US: Ferrous scrap export index drops $3/t w-o-w amid dull steel demand
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- High steel inventories limit trade in Vietnam, Bangladesh
- Turkiye favours affordable EU scrap amid rebar price drop
The US ferrous scrap export index dropped by $3/tonne (t) w-o-w on Friday (6 December 2024), as major buyers showed weak interest amid sluggish domestic steel markets.
For example, Turkiye is increasingly turning to cheaper EU-origin scrap following a drop in rebar prices, exports, and domestic sales. Similarly, Bangladesh continues to see weak scrap sales amid declining rebar prices, due to halted government projects and low public sector demand.
As a result, US sellers have pulled back from the market, expecting a recovery closer to the new year. Traders believe that supply will tighten ahead of the holiday season, which may drive prices up and spark renewed activity.
FOB assessments (US East Coast, bulk)
- HMS (80:20) decreased by $3/t w-o-w to $313/t.
- Shredded declined by $3/t w-o-w to $333/t.
CFR assessments (bulk)
- HMS (80:20) was at $338/t CFR Turkiye, a drop of $2/t w-o-w.
- HMS (80:20) stood at $360/t CFR Vietnam, down $5/t w-o-w.
- HMS (80:20) was at $370/t CFR Chattogram, down $2/t w-o-w.
Buyer-side market
Turkiye: Turkish imported scrap prices for US-origin material remained under pressure, decreasing by $2/t w-o-w and settling in the range of $335-340/t CFR, maintaining levels last seen in late November 2022. Mills remained cautious, expecting further declines in end-product prices.
Pressure on prices intensified due to weak demand for Turkish-finished steel products, along with high inventories, falling rebar prices, and seasonal slowdowns. European and Baltic exporters benefitted from a weaker euro, while US sellers had to cut prices to stay competitive.
A deadlock persists between sellers holding firm on prices and mills bidding lower. Indicative values for US-origin scrap were at $336-337/t CFR, with buyers resisting offers above $340/t CFR amid bearish market sentiment.
Bangladesh: Demand for US-origin scrap in Bangladesh was muted this week, due to slow rebar sales, falling billet prices, high steel inventories, and cautious sentiments. Declining global and domestic scrap offers exacerbated the downtrend. US HMS (80:20) was offered at $370-375/t, with bids at $360-365/t, while offers for shredded stood at $385-390/t, with bids at $380/t.
In late November, a 32,000-t deal of US-origin scrap was finalised for Bangladesh, with prices at $370/t CFR for HMS (80:20), $375/t CFR for shredded, and $380/t CFR for bonus. Market activity remained slow as buyers took a wait-and-watch approach, with many looking for prices below $380/t for shredded and under $365/t for HMS. Mill utilisation stayed low as participants expected further price declines, leading to limited trading.
Vietnam: For US-origin bulk HMS 1 and 2 (80:20) scrap, Vietnamese mills were not ready to pay more than $350/t CFR, while the material was available at around $360/t CFR, creating a significant gap between offers and bids, which limited price agreements. "Vietnamese producers have considerable stocks of longs due to weak sales. So, they are not interested in scrap," a source said.
Economic uncertainty and concerns over potential trade tensions between China and the US further dampened buyer sentiment, leading mills to hold off on large imports.
Outlook
The expectation of a market recovery after the Christmas holidays has led US suppliers to adopt a cautious stance. They are waiting for clearer signs before re-entering aggressively. Parallelly, Turkish buyers are taking a similar approach, holding off on bulk purchases until they see an improvement in rebar sales.
