US West Coast export yard ferrous scrap prices moved down in Portland and were rangebound in Los Angeles and San Francisco on Tuesday. Export scrap prices may increase in early April as export scrap inquiries rise and dock prices move up.
The Davis Index for US-origin HMS 1&2 (80:20) has risen by $3.76/mt over the past week to $427/mt cfr Turkey. Moreover, global activity such as Asian mills seeking bulk and higher dock prices in the UK are supporting higher ferrous scrap price expectations and deals from the US in early April.
India’s domestic ferrous scrap prices are rising on tight inventories and higher iron ore prices. Indian buyers actively purchased steel over the past week after having retracted inquiries earlier despite the rising COVID-19 infections in the country that might affect demand and result in a price correction.
Domestic ferrous scrap prices are also rising in South Korea, Malaysia, Taiwan, Thailand, and Vietnam. One large South Korean firm is expected to actively bid for Japanese and Russian scrap this week. Due to limited volumes from those destinations, mills could turn to US sources to complete the buying plan, which would further support US export bulk prices. Chinese mills are also increasing prices on finished steel, which may push them to increase domestic scrap prices from the present flat trend.
Bangladesh and Pakistan are expected to return to imported scrap deals after the holiday with a preference for bulk over containers.
Japanese export offers have increased in cfr terms due to an increase in freight rates but offer prices are also firming up with rising inquiries.
The weekly Davis Indexes for export yard scrap in Portland decreased by $7-9/gt with #1 HMS dropping by $8/gt to $353/gt delivered, shredder feed down by $7/gt to $256/gt delivered, and P&S 5ft falling by $9/gt to $365/gt delivered on Tuesday.
Participants in Portland were expecting regional mills to decrease prices on shredded and #1 HMS grades by $10-15/gt in April, but today they received offers with a price erosion of $20-25/gt against March settled prices. The lower prices received some resistance, and most grades will only drop by $20/gt.
In Los Angeles, dock prices have publicly remained unchanged over the past two weeks, but some market participants received a premium on higher load transactions. #1 HMS and P&S 5ft were flat at $265/gt and $285/gt delivered, respectively. Shredder feed increased by $7/gt to $184/gt delivered. Export dock prices fell in March and regional docks are expected to firm up prices in April with the uptrend in export scrap both in bulk and containers.
San Francisco’s export yard indexes rose slightly after trending flat last week with #1 HMS increasing by $1/gt to $326/gt delivered while P&S 5ft and shredder feed rose by $2/gt to $338/gt, and $219/gt delivered, respectively.