US East Coast and Houston dock collection prices for ferrous scrap continue to climb but are lagging when compared with the strength in exports and the domestic market.
Export yard price increases of at least $25/gt or more are expected to transpire in the near term. Supply is also tightening as dealers are holding on to material in anticipation of higher prices.
Dockside prices have gradually risen throughout November in tandem with exports between Turkey and the US, where prices have increased from around $292-294/mt cfr for #1 HMS on Oct 27 to $360/mt cfr on Tuesday, representing a rise of about $67/mt for the grade during that period.
Export yard buying prices for #1 HMS on the East Coast range between $255-260/gt on Tuesday, like last week and up by around $30/gt since Oct 27. Market participants are expecting the price to rise soon considering the growing gap between dock collections and exports. However, some sellers state that exporters are still fulfilling tons on lower priced orders from late October, which clarifies the price lag.
Domestic steel and scrap demand remain strong with December trading on the horizon and prices projected to rise from $30-60/gt, another factor creating price momentum.
In Boston, the weekly Davis Index for export yard #1 HMS climbed by $5/gt to $260/gt and P&S 5ft increased by $6/gt to $270/gt, delivered Boston dock. Shredder feed jumped by $13/gt to $192/gt delivered Boston export yard.
The weekly Davis Index for export yard buying prices in New York ticked up by $1/gt to $259/gt delivered for #1 HMS and by $2/gt to $268/gt delivered dock for P&S 5ft. The index for shredder feed surged by $21/gt to $214/gt delivered.
The price surge observed in shredder feed is in response to new order fulfillment while considering tightness of the grade. Other materials, such as #1 HMS and P&S 5ft could follow this trend shortly as new deals between US and Turkey transpire.
In Philadelphia, the Davis Index for export yard collection prices of #1 HMS increased $2/gt to $258/gt delivered and P&S 5ft went up by $4/gt to $269/gt delivered Philadelphia dock. The index for shredder feed soared $25/gt to $216/gt delivered.
In Houston, the weekly Davis Index climbed $15/gt for #1 HMS and $16/gt P&S 5ft to $295/gt delivered and $311/gt delivered Houston dock, respectively. The shredder feed index increased $11/gt to $224/gt delivered.
Trading in the domestic Houston region is described as “on fire” as attention is now focused away from docks despite the moderate increases.