US ferrous scrap export index drops $5/t w-o-w amid dull buying interest
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- Turkish mills turn focus on reducing inventories
- Bangladesh caps intake amid slow infra activity
The US ferrous scrap export index dropped by $5/tonne (t) w-o-w as of Friday (29 November 2024), as major buyers such as Turkiye showed weak interest in US-origin bulk scrap amid sluggish steel markets.
In Turkiye, with finished long steel prices declining and the US dollar strengthening, European scrap has become more attractive than US scrap. Additionally, in Bangladesh, a sluggish domestic rebar market, driven by weak construction and government projects, led buyers to hold off from purchasing bulk volumes, as steel and scrap stocks are sufficient for at least a month.
Meanwhile, US market insiders stated that slow activity at scrap yards, due to the winter weather, could support steady trading across most grades.
FOB (US East Coast) assessments
- HMS (80:20) bulk decreased by $5/t w-o-w to $316/t.
- Shredded bulk declined by $5/t w-o-w to $336/t.
CFR assessments
- HMS (80:20) bulk was at $340/t CFR Turkiye, a drop of $4/t w-o-w.
- Deep-sea bulk cargoes of HMS (80:20) CFR Vietnam stood at $365/t, up $2/t w-o-w.
- HMS (80:20) bulk was at $372/t CFR Chattogram, down $3/t w-o-w.
Buyer-side market
Turkiye: Turkish imported scrap prices for US-origin material remained under pressure, falling by $3/t w-o-w to maintain a range of $335-340/t CFR - levels last seen in late November 2022. Expectations for a seasonal price increase this winter have faded due to the ongoing decline in rebar sales.
Turkish market participants stated that mills are cutting finished steel inventories in expectation of potential tariffs from Canada, Mexico, and China, which has reduced scrap demand. A Turkish trader added that the continued fall in US scrap prices this month has been driven by oversupply from European recyclers and cheaper billets from China and the Commonwealth of Independent States (CIS) region.
As per a Turkish mill source, a potential weakening of the dollar against the lira could reduce raw material costs for mills, enabling them to limit production expenses and support more competitive steel pricing. This is because domestic producers procure raw materials in US dollars but sell finished steel in Turkish lira.
Bangladesh: Demand for US-origin scrap in Bangladesh was subdued this week, with limited deals due to cautious buying and expectations of lower bids. This was a result of slow infrastructure development and weak rebar sales in the domestic market. A Chattogram-based mill representative stated, "The market is sluggish due to the government transition, with steel demand subdued."
Meanwhile, mills in Bangladesh operated at almost half of their capacity due to slow finished product sales, further reducing the need for scrap. As a result, local traders showed little interest in scrap offers.
Outlook
US scrap dealers expect stable prices for December deliveries, with mini-mills planning to restock ahead of winter and the approaching storm season due to low inventories. The potential 25% tariff on imports from Mexico and Canada and an additional 10% on Chinese imports could raise costs for US steelmakers, though the effect on scrap is still unclear, as market participants await further details. Despite this uncertainty, expectations are that workable prices of deep-sea scrap could drop to $330/t by year-end.
