US: Ferrous scrap export index drops $5/t w-o-w as Turkiye shifts to cheaper European supply
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- Stronger dollar turns European scrap prices more attractive
- Cheaper Asian billets flood Turkiye, other importing regions
The US ferrous scrap export index declined by $5/tonne (t) w-o-w. US scrap prices were higher than those in Europe, amid a stronger greenback, which led to reduced demand from Turkiye.
Additionally, the influx of cheaper Asian billets into major scrap-buying regions such as Turkiye, combined with their weak finished steel sales, kept buyers away from high-priced US scrap.
The seasonal decline in steel demand and limited expectations for a full return to hot metal production have also put pressure on prices.
FOB assessments
- BigMint's assessment for HMS (80:20) bulk FOB US East Coast edged down by $5/t w-o-w to $332/t on Friday.
- BigMint's assessment for shredded bulk FOB East Coast also declined by $5/t w-o-w to $352/t on Friday.
CFR assessments
- Weekly assessment for US-origin HMS (80:20) bulk scrap was at $356/t CFR Turkiye, stable w-o-w.
- Weekly assessment for deep-sea bulk US cargoes of HMS (80:20) CFR Vietnam stood at $372/t, up by $6/t w-o-w.
- Weekly assessment for US-origin HMS (80:20) bulk prices was at $380/t CFR Chattogram, up by $1/t w-o-w.
Market overview
With the US dollar rising to its highest level since October 2023, US ferrous scrap has become more expensive in international markets, potentially reducing export demand. Additionally, a slight rise in inflation could slow the pace of Federal Reserve rate cuts, supporting a stronger US dollar.
US domestic ferrous scrap prices for November deliveries in the country's southeast mostly dropped compared to October, narrowing the gap with Midwest tags after a decline in export offers.
Major southeast mills continued to seek deeper discounts, driving increased purchases from Midwest suppliers, where prices had recently been lower. Following a $10/t price cut, southeast mills' scrap prices aligned more closely with those in the Midwest.
Buyer-side market
Turkiye: Turkish import prices of US ferrous scrap were under pressure, with tags falling slightly to $356-360/t CFR Turkiye. This decline was largely due to weak demand, driven by low-priced Asian billets and sluggish finished steel sales.
Mills in Turkiye are cautious, quoting lower bids around $350-355/t, as they wait for demand to improve before making additional purchases.
Demand for US-origin ferrous scrap in Turkiye decreased amid recent European short-sea and deep-sea bookings at $350-356/t.
As the euro approaches a two-year low against the US dollar, European scrap prices have become competitive, making them attractive to Turkish buyers.
Bangladesh: Demand for US-origin imported scrap in Bangladesh remained sluggish, as high inventories and delayed construction projects limited demand for imports.
A Chattogram-based trader mentioned, "Major mills have sufficient scrap inventories to sustain minimal production until January, which has led to a cautious approach toward new purchases."
Despite this, US-origin HMS (80:20) offers stood at $380-385/t, but mills in Bangladesh capped their bids at $370/t, due to price sensitivity and thin operational margins.
Weak demand for scrap has made it difficult for higher-priced US-origin material to gain traction.
Outlook
The US scrap export market is showing cautious signs of improvement, with expectations that winter restocking and a potential rise in demand in Asia could provide a boost. Meanwhile, India's re-entry for bulk inquiries signals a slight shift in market sentiment. However, prices are expected to remain range-bound, as supply will continue to exceed demand in the near term.
