US domestic scrap has seen three consecutive price increases since November totaling about $90/gt, depending on region and grade. However, the trend is reversing ahead of February trading week, according to market participants who spoke with Davis Index.

 

The initial expectation of markets remaining flat through February are now trending towards a price decrease by $10-20/gt next month, due to a mild weather, softer export scrap prices to export destinations in Asia, and the latest Turkish scrap deal at lower-than-expected prices.

 

A Turkish mill closed a deal with a US supplier involving 35,000mt of HMS 1&2 (95:5 ) at $295/mt cfr for February shipment. The price translates to $288-290/mt cfr for HMS 1&2 (80:20) deep sea, down by $11-12/mt compared to $300/mt on HMS 1&2 (80:20) prevalent in Turkey through December and early January. 

 

Softer export prices also dominated emerging markets in Southeast Asia this week with HMS 1&2 (80:20) prices in the region declining by $10-15 from $250-255/mt earlier in January to $240/mt fas Taiwan from Los Angeles this week. 

 

Closer home, the downtrend can be explained by lower dock prices in Los Angeles and rumors about lower prices on the east coast too. Feburary being a short month, mild winter in the midwest and east cost, and slightly higher scrap volumes from sellers who were previously witholding inventory in the hope of higher offers are also some of the reasons being cited for the downward trend.

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