US: Ferrous scrap export index rises $15/t w-o-w on bullish demand from Turkiye

The US ferrous scrap export index increased sharply due to firm offers and better inquiries from Turkish steelmakers for November 2024 shipments, as their rebar sales in the domestic and export markets continue to rise supported by buyer preference for high-priced ferrous scrap from the US.

As per market insiders, when the US Fed cut interest rates, stockists wanted rebar and there was a supply shortage in every region, so this is the consecutive week of domestic rebar demand is very strong in the US.

US offers for HMS (80:20) were reported at $390-400/t CFR Turkiye, which the mills were heard to resist, with the highest bid reported at $385/t CFR towards the weekend. Buyers are capitalising on cautious sentiments among sellers, while strong demand has pushed scrap-rebar spreads to their highest levels since Mid of 2023.

FOB price assessments:

BigMint's assessment for HMS (80:20) bulk FOB East Coast increased by $15/t w-o-w to $356/t on Friday, up from $341/t a week ago.

BigMint's assessment for shredded bulk FOB East Coast also increased by $15/t w-o-w to $376/t on Friday, up from $361/t a week ago.

CFR Price assessments:

Weekly assessment for US-origin HMS (80:20) bulk scrap stood at $385/t CFR, down by $17/t w-o-w.

Weekly assessment for deep-sea bulk US cargoes of HMS (80:20) CFR Vietnam stood at $355/t, up by $4/t w-o-w.

Weekly assessment indicates that US-origin HMS (80:20) bulk prices stood at $380/t CFR Chattogram and rose $5/t from last week.

US dockyard export prices on the East Coast were increased followed by a 3 days long port strike in the East Coast and Gulf Coast port side, however, a steady export market coupled with multiple deals from the US East Coast to Turkiye pushed the price outlook upward.

Buyers' market sentiment

Turkiye active for November shipments: Sources indicated that Turkiye is likely to see an uptick in deal activity, as Turkish steelmakers aim to increase long steel export offer prices. However, some buyers have shifted to Asian markets in search of more competitive pricing.

A Turkish trader indicated that scrap recyclers were seeking at least $385/t CFR for US and Baltic-origin HMS (80:20). Sentiment on the sell-side remained largely bullish, driven by strong domestic rebar sales, ongoing disruptions from the US port strike, and unattractive billet offers in recent weeks due to recovering iron ore prices.

Turkish mills were offering rebar for export at $600-630/t FOB, though trade volumes were limited as buyers sought lower prices. Domestically, demand for long steel has increased, fueled by rising prices, low inventory levels, and the depreciation of the Turkish lira against the US dollar.

Bangladesh remains silent: Bangladesh's demand for scrap has dropped significantly, with bare minimum inquiries of US-origin bulk scrap prices. As per a market insider, US suppliers are currently holding firm offers after looking at bullish market conditions.

US East Coast dockworkers' strike ends

The U.S. East Coast and Gulf Coast dockworkers strike has officially ended after a tentative wage agreement was reached between the International Longshoremen's Association (ILA) and the US Maritime Alliance (USMX). The three-day strike will cease immediately, halting all job actions.

The agreement extends the current contract until January 15, 2025, allowing for ongoing negotiations on unresolved terms, although specific wage details were not disclosed.

The labour union had initially demanded a 77% raise, while the employer group proposed close to 50%. After extended negotiations, the strike was resolved, marking the end of the largest port work stoppage in 50 years.

The strike severely disrupted supply chains, preventing cargo from unloading at ports from Maine to Texas, leading to product shortages and ship congestion.

This agreement is expected to restore labour stability at U.S. ports. As both sides continue to negotiate outstanding contract terms, the resolution of the strike is critical for normalizing trade and alleviating the supply chain disruptions it caused.

Outlook: The US ferrous scrap export market is expected to remain firm, influenced by bullish global ferrous scrap trade flow and a continued stable trade flow pattern, especially where Turkiye is concerned. Turkish mills purchase raw materials in US dollars but sell finished products in lira, the strengthening US dollar is likely to push higher domestic long steel prices.