US: Ferrous scrap exports rise nearly 30% m-o-m in Aug'24

In August 2024, US ferrous scrap exports increased significantly by 29% m-o-m to 1.6 million tonnes (mnt) from 1.24 mnt in July, according to customs data compiled by BigMint.

However, August scrap exports rose by 13% y-o-y compared to1.41 mnt recorded during the same month in 2023. Exports decreased 7% y-o-y to 10.12 mnt in January-August 2024 from 10.86 mnt in the same eight months in 2023.

Major indicators:

Crude steel production: Crude steel production in the US increased by 2% m-o-m to 7.05 mnt in August, according to World Steel Association (WSA) data.

US pig iron imports: Pig iron imports in the US increased by 6% m-o-m to 0.33 mnt in August from from 0.31 mnt in July. This increase was mainly driven by Brazil, which contributed over 90% of total pig iron imports by the US as prices of the material, FOB Brazil, were slightly lower in August compared to July.

Pig iron usually should not be considered as a scrap substitute but rather as a source of clean iron units that can be used to supplement and enhance the scrap charge. Many EAF operators in the US prefer to use pig iron to blend with scrap and other feedstock materials due to its high Fe content, low gangue, and chemical purity.

US ferrous scrap imports: Ferrous scrap imports by the US rose by 9% m-o-m to 0.38 mnt from 0.35 mnt in July. with around 70% volume imported from Canada.

US FOB prices in August

• The average price of HMS (80:20) FOB east coast increased to about $345/tonne (t) in August, reflecting a $17/t fall from $362/t in July.
  
  
• The average price of shredded FOB east coast increased to about $365/t in August, reflecting a $17/t fall from $382/t in July.
  
  

Country-wise shipments

Turkiye continued to be the top importer, followed by Bangladesh, Mexico, and Taiwan. Notably, a substantial increase was observed in Bangladesh and Turkiye's ferrous scrap imports.

Turkiye: Exports to Turkiye, the leading importer of scrap worldwide, were up notably by 41% m-o-m, from 0.41 mnt in July 2024 to 0.58 mnt in August 2024. Against August 2023's 0.41 mnt, export volumes increased notably by 841% y-o-y.

In the first eight months of the year (January-August), exports increased by 17% y-o-y, from 2.67 mnt in 2023 to 3.13 mnt in 2024.

During the period under review, rising iron ore prices and the cancellation of high-priced Chinese billet orders provided some support to the climbing scrap import volume. Buyers remained active in purchasing scrap, and a few confidential deals were concluded, which were revealed later.

Bangladesh: US ferrous scrap exports to Bangladesh recorded the highest volume in 2024 so far with over 100% m-o-m increase to 0.3 mnt as compared to 0.13 mnt in July. On a y-o-y basis, as compared to August 2023's 0.18 mnt, volumes surged 67%. In the first eight months of the year, exports to Bangladesh increased by 40% y-o-y from 0.96 mnt in January-August 2023 to 1.34 mnt in January-August 2024.

Mexico: The US exported approximately 0.19 mnt of scrap to Mexico in August, a rise of 27% m-o-m from 0.15 mnt in July. On a y-o-y basis, exports decreased 27% compared to 0.26 mnt during the same period last year.

In the first eight months of the year, exports dropped y-o-y by a considerable 39% from 2.45 mnt in January-August 2023 to 1.5 mnt in January-August 2024.

Taiwan: Taiwan witnessed a significant rise of 10% m-o-m to 0.11 mnt as compared to 0.10 mnt in July. Compared to July 2023's 0.11 mnt, export volumes remained stable y-o-y.

Additionally, exports inched down by 2% y-o-y from 0.83 mnt in January-August 2023 to 0.81 mnt in January-August 2024.

India: Ferrous scrap exports from the US to India are down 11% m-o-m to 0.08 mnt as compared to 0.09 mnt in July. Compared to August 2023's 0.13 mnt, volumes fell by 38% y-o-y.

Similarly, exports fell by 8% y-o-y from 0.79 mnt in January-August 2023 to 0.73 mnt in January-August 2024.

India's preference for US-origin ferrous scrap remains subdued amid weaker domestic steel sales and declining finished steel prices amid higher usage of domestic scrap and other alternatives such as sponge iron.

Other regions such as Peru, Pakistan, Vietnam, and Thailand contributed to the slight rise in export volumes to 0.13 mnt in August.

Port wise shipment share: New York led as the exporting port for ferrous scrap, with total volumes of approximately 0.21 mnt (13% of total export volumes), followed by Los Angeles and Boston.

Outlook

US mills are likely to increase their scrap consumption due to planned outages, raising capacity utilisation to above 80%. Supply constraints from sellers are anticipated to push prices higher in the near term. US export volumes to Turkiye are likely to remain stable, but Asian markets may turn to suppliers located geographically nearer, like Australia, the Middle East, and West Africa. This shift could reduce demand for US material due to longer voyages and higher freight costs. The overall outlook suggests sideways pricing, with moderate changes as supply and demand factors evolve.