The weekly US West Coast export yard ferrous scrap prices continued to trend sideways on Tuesday in a trend that was witnessed on the East Coast and the Gulf as well.
West Coast sellers expect strong sales to Asia and the Middle East to continue through the summer and dockside prices in the EU and UK began to rise on Tuesday.
The Turkish Davis Index for US-origin HMS 1&2 (80:20) reversed its course this week and rose by $12.48/mt to $433.13/mt cfr Turkey on active deals. While scrap for this destination is sourced from the US East Coast, its movements sway global sentiment.
Offers from the US and Europe to Turkish mills continue firm, though Turkish domestic scrap ticked down over the past week. The slight domestic price erosion is not expected to radically affect import prices unless further drops become evident.
Domestic scrap in India began to increase on moderate demand and tight supply despite some market uncertainty on a resurgence of COVID-19 cases. Market participants are concerned about a prospective nationwide lockdown but point to vaccination efforts and the potential better administration of rules given the learning curve encountered in 2020.
Stronger confidence in India could easily increase construction activity and mill demand for scrap but buyers are operating cautiously for now as Indian mills have reduced production in some cases by 10-30pc.
Bangladesh buyers expect additional steel buying activity as the government eases the COVID-19 lockdown at the end of April. Both Bangladeshi and Pakistani mills are expected to increase inquiries on mill needs. Additionally, finished steel prices are either trending flat or beginning to rise.
South Korean and Vietnamese mills may increase steel production to meet Chinese demand for imported semi-finished and finished steel.
Japan’s domestic scrap prices have risen in the past few weeks, but were trending flat on Tuesday. Still export prices may rise on tight domestic scrap supplies and potential increases in mill demand on stronger domestic and export sells.
The weekly Davis Index in Portland for export yard scrap was rangebound with #1 HMS climbing by $2/gt to $331/gt delivered, while P&S 5ft and shredder feed remained unchanged at $354/gt delivered and $251/gt delivered, respectively.
US domestic mills are expected to trade sideways in May against April settled prices. Finished steel demand is strong, steel inventories are limited, and scrap inflows are considered adequate without extensive high feedstock increases despite strong scrap buying prices.
With COVID-19 changes globally and strong scrap demand, the usual dip in prices on seasonal effect in May is not expected by sellers. Some are concerned that mills may seek to apply downward pressure on prices, but with strong export demand and tight scrap supply globally, most participants expect a mostly flat market.
In Los Angeles, the indexes trended mostly unchanged this week with #1 HMS rising by $1/gt to $296/gt delivered, and P&S 5ft and shredded remaining unchanged at $306/gt delivered and $200/gt delivered, respectively.
San Francisco’s export yard indexes were also rangebound with slight increases. The Davis Index for #1 HMS rose by $1/gt to $325/gt delivered. P&S 5ft climbed by $3/gt to $334/gt delivered and shredder feed remained unchanged at $216/gt delivered.