US East Coast ferrous scrap exporters were looking to place tons into the domestic market on Friday, to take advantage of stronger US scrap pricing relative to global prices. Conversations between exporters and US mills began last week and continued into this week.
The threat of additional supply coming into the US market has further depressed already negative April pricing sentiment with market sources anticipating a possible drop of $10-$30/lt in obsolete scrap pricing during the next buy week, expected to start April 3.
US shredded scrap prices settled around $320-$325/lt delivered Midwest mill during the March buy week. Even if a down-$10-$30/lt April market materializes, prices of $290-$315/lt would still be more attractive than international pricing.
The latest North American bulk sale of scrap to Turkey was finalized Friday afternoon at $274/mt CFR for a 50,000 mt full shred cargo. That would equate to around $255/lt FOB East Coast.
One offer was heard from an East Coast exporter to a Midwest mill at $305/lt delivered mill, down $15-$20/lt compared to March pricing levels. Most other discussions are not involving pricing yet.
"No prices yet, just parties trying to place tons," one supplier said. Offers have been heard into the Midwest and Southeast. Another mill buyer who has been offered coastal material indicated that he had not received a pricing indication yet.
"I'm in no hurry," he said. "We'll see where this thing goes."
Any drop in shredded scrap prices could impact prime grades, the most heavily sought grade during the March buy week.
Prime scrap prices are averaging around a $65/lt premium over shredded scrap prices in the US. The premium is at a five-year high.
"The talk of primes being firmer again in April, it doesn't make any sense," another mill buyer said. "I think the market will be down $20-$30/lt across the board."
US bulk export pricing to Turkey peaked at $303/mt CFR after a sale on March 7 but it has fallen to around $270/mt CFR HMS 80:20 basis this week.
"I expect we will see a drop in the domestic market to reflect [the export drop]," one scrap supplier said. "From my standpoint, scrap flows seem to be pretty good, export is down and domestic mills are talking the market down. I don't see much to keep the market from falling."
East Coast export yards have also been consistently dropping their inbound offer prices to local suppliers.
Offers for HMS were as high as $245/lt delivered dockside earlier this month and now as low as $190/lt delivered.
