US: Ferrous scrap export index witnesses sharp drop of $16/t w-o-w

• Weak steel demand impacts Turkiye, Bangladesh
  
  
• US domestic ferrous scrap market stagnates in Q3CY'24
  
  

The US ferrous scrap export index showed a downtrend w-o-w, attributed to limited interest from Turkiye, with US freight rates higher compared to the previous week. A spurt of strong import demand, particularly from Turkiye, also supported prices last week.

FOB price assessments

• BigMint's assessment for HMS (80:20) bulk FOB East Coast decreased by $16/t w-o-w to $343/t on Friday from $359/t a week ago.
  
  
• BigMint's assessment for shredded bulk FOB East Coast also decreased by $16/t w-o-w to $363/t on Friday from $379/t a week ago.
  
  

CFR price assessments

• The weekly assessment for US-origin HMS (80:20) bulk scrap stood at $372/t CFR, down by $16/t w-o-w.
  
  
• The weekly assessment for deep-sea bulk US cargoes of HMS (80:20) CFR Vietnam stood at $368/t, up by $3/t w-o-w.
  
  
• The weekly assessment for US-origin HMS (80:20) bulk prices were at $385/t CFR Chattogram, stable compared to the last week.
  
  

US domestic scrap market

US mills entered the scrap market later than usual last week, in an effort to stabilise prices amid a slowdown in industrial scrap generation. Prices generally rose by around $20/t, though mills in Detroit and Chicago resisted the upward trend.

However, logistical challenges from recent hurricanes in the southeastern states may impact scrap delivery, while Florida could see increased availability once floodwaters recede.

Generally, at the year-end, scrap prices often climb up due to dealers building inventory for winter and seasonal supply slowdowns.

As per industry recyclers, the US ferrous scrap market was stagnant in Q3CY'24 (July to September), with weak consumer demand preventing price increases.

HRC prices in the US Midwest held steady, with soft demand and high inventory levels keeping the market stable. Buyer sub-index prices were at $32-35.5/cwt (per hundredweight, with one hundredweight equal to approximately 45.36 kg). Despite ongoing oversupply concerns, the market maintained its stability.

Buyers' market sentiments

Turkish mills prefer EU scrap: Sources indicated that Turkiye's increased scrap inflow from Europe heightened competition and led to price reductions, with EU-origin HMS (80:20) now trading at $370/t CFR and even lower at around $365/t.

Turkiye's scrap market is currently experiencing downward pressure on prices due to weak domestic demand for finished steel and increased competition from European imports.

As per industry reports, a recent $16/t drop in bulk scrap prices following a previous rise was due to declining rebar sales, and suppliers were forced to offer discounts to attract buyers.

Recently, around 2-3 bulk scrap cargoes were booked, with US bookings at $377-378/t CFR Turkiye.

India enters the bulk market: A US West Coast exporter recently sold two scrap cargoes to Indian steelmakers, both consisting of a mix of HMS and shredded.

The cargoes were priced at $385-390/t and $400/t CFR East Coast India, respectively, and are expected to arrive at Paradip/Vizag port by mid-November to early December, according to market sources.

Bangladesh remains silent: Bangladesh's demand for US-origin imported bulk ferrous scrap remains sluggish, primarily due to weak demand for finished steel, ongoing rains that are delaying construction projects, and buyers holding sufficient inventory.

As per a Chattogram-based importer source, "US West Coast bulk scrap prices were last reported at $380-385/t."

Additionally, a representative from a major trading house from Chattogram-based mills stated, "We have enough stock until December, resulting in reduced scrap consumption and capacity utilisation of around 50%."

Outlook

Despite soft demand, as October progresses, tighter domestic supply conditions could prompt US mills to make early purchases, while anticipated weak scrap collections in November and December may open the door for modest price hikes by year-end. The export market will be affected parallelly by the rise in domestic scrap prices, so the outlook suggests cautious optimism for a stronger finish in the coming days.