US: Ferrous scrap export index rises by $8/t w-o-w on improved demand from Turkiye
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The US ferrous scrap export index continued to rise due to limited scrap availability, allowing suppliers to maintain firm price levels. The index recovered by $8/tonne (t) w-o-w as Turkish mills resumed scrap bookings following delays in Chinese billet arrivals followed by several cancellations.
While export activities were initially sluggish, the latter half of the week saw three to four cargoes sold from the East Coast at higher prices compared to late August.
Assessments:
- BigMint's assessment for HMS (80:20) bulk FOB East Coast increased by $8/t w-o-w to $344/t on Friday, up from $336/t a week ago.
- BigMint's assessment for shredded bulk FOB East Coast also increased by $8/t w-o-w to $364/t on Friday, up from $356/t a week ago.
Buyers' market sentiment
Turkiye: In the latter half of the week, activity in the Turkish ferrous scrap market has picked up. Turkish scrap mills reported increased negotiations amid sector rumours and fluctuating price expectations. US scrap collectors are holding firm on a $375/t CFR target for HMS (80:20), while Turkish mills, facing improved demand for long products, were compelled to accept higher prices to restock.
As per a trader source, US domestic shredded prices are anticipated to decrease by $15-20/t, with EU supply levels remaining stable. Weak demand from China has diminished expectations of a Turkish scrap price increase. However, a decline in Turkish scrap prices is also unlikely. Turkish steelmakers are raising steel offers due to a modest steel restocking, aiming to stabilise scrap prices while boosting steel sales.
Bangladesh: Imported scrap prices in Bangladesh remained subdued due to weak demand and ongoing delays in the opening and processing of letters of credit (LCs). Current offers for US-origin bulk HMS are at $395-398/t CFR, while bids are reportedly below $388/t.
Bangladeshi mills have shown reduced interest as production levels have dropped to around 50% of previous capacities, and domestic rebar sales are under pressure. US suppliers have largely paused their offerings, choosing to assess market trends and wait for more favourable conditions to ensure profitability. The market faces additional challenges, including high sea freight costs and declining scrap collection rates. With weak construction activity expected to continue this month, there is little optimism for a rebound in long product demand.
Domestic rebar prices in the US fell due to persistent weak demand. Despite a generally soft market, some participants reported steady demand, particularly in energy and infrastructure sectors. Comments on the potential impact of an expected Federal Reserve interest rate cut were mixed. While some believed it could spur economic activity and improve the rebar market, others suggested that any positive effects would be delayed, citing sluggish demand that may persist regardless of rate changes.
The spread between shredded scrap and domestic rebar now stands at $396/t from $406/t reflecting the decline in domestic rebar prices.
Outlook: Scrap exports are anticipated to stay steady as they offset the effect of 15 planned outages in September. Domestic prices may drop by $20/t due to weaker demand, with predictions ranging from a $10-30/t decrease to a flat or softer market which will push scrap into the export market. US mills have started issuing cancellation notices, they are unlikely to experience significant pressure due to the ample supply available.