US ferrous scrap export offers from east coast continue to rise amid firm price outlook

US ferrous scrap export prices have remained slightly higher from the East Coast amid recent strong exports that have raised expectations for July trade in obsolete grades. Turkiye's renewed interest in global deep-sea scrap markets has boosted optimism for US domestic ferrous scrap exports.

On the other hand, US domestic ferrous scrap prices are facing downward pressure amid a sluggish domestic steel market. Meanwhile, US pig iron import prices remained stable in the holiday-shortened week. Buyers are holding off on additional purchases of pig iron, awaiting clarity on developments in the domestic ferrous scrap market.

Suppliers noted that sideways offers might not suffice if deep-sea ferrous prices to Turkiye rise. Sideways offers may not be converted into deals with exports and domestic capabilities regarding July's trade.

Turkiye books US scrap vessels: Four to Five US East Coast bulk scrap cargoes have been booked in the first week of July so far as compared to three in the previous week. There is speculation about a potential price of $390/t CFR for HMS (80:20), indicating strong demand in the Turkish import market.

Despite Turkish mills increasingly favouring, cheaper Chinese and ASEAN billets, rising billet prices and improved iron ore sentiment from China are narrowing the cost advantage over scrap. Chinese billet prices to Turkiye have risen to around $520-522/t CFR, up from $512-518/t CFR in previous weeks.

Bangladesh bulk scrap inquiries for US scrap: A West Coast origin deal was reported in early July. A West Coast supplier sold 32,000 t to Bangladesh with HMS (80:20) at $409/t CFR, shredded scrap at $414/t CFR, and bonus scrap grade at $419/t CFR. Lower scrap prices in recent deals reflect a slowdown in bulk exports from the West Coast to Asian importers.

According to a representative from a major trading house, US West Coast offers are scarce. However, bid levels for HMS (80:20) CFR Chattogram are currently capped at $405/t maximum. Also, 16,000 t of HMS (70:30) sold at $400/t in two bulk cargoes comprising 8,000 t each from Singapore.

Assessment trend

• BigMint's assessment for HMS(80:20), FOB East Coast increased by $3/t w-o-w to $364/t on Friday, from $361/t a week ago.
  
  
• BigMint's assessment for shredded, FOB East Coast increased by $3/t w-o-w to $384/t on Friday, from $381/t a week ago.
  
  

Brent oil prices: Oil prices, including brent crude futures, stood at $87.41 per barrel and U.S. West Texas Intermediate (WTI) at $83.97, have shown minimal change in Asian trading. They are set for a fourth consecutive week of gains, nearing highs last seen in late April. This rise is driven by expectations of robust summer fuel demand in the U.S., the world's largest oil consumer, alongside geopolitical tensions in the Middle East. Trading was thin due to the fourth of July holiday in the U.S., with WTI not settling.

Influence on scrap export price:

• WTI crude futures primarily impact the domestic aspects of scrap metal export costs, such as processing and transportation within the US.
  
  
• Brent crude futures influence international shipping and logistics costs, affecting the global competitiveness of US scrap metal exports.
  
  

Outlook: Looking forward, industry sources anticipate that the continued necessity for Turkish mills to procure additional scrap for August shipments will keep US scrap export prices firm. This comes as a sluggish steel market continues to suppress demand for US domestic scrap.