In today’s steel business briefing there is an article which follows outlining the quick drop in scrap pricing for export to Taiwan via containers. In short, scrap dropped about $100/mt in the past 3 weeks and is now about $180 to $190 mt loaded containers at the LA port. Meanwhile, steel mills in the USA have announced price increases for June and really don’t want to hear about any scrap price reduction on the west coast. They will continue to benefit from the import restrictions put on imported flat rolled and long products. The demand for steel in the USA has not substantially increased and mill utilization is still around 75%. My opinion is that there will be some domestic price erosion during the summer months.
“US container scrap falls to $210/mt CFR Taiwan
Containerized US scrap export sales sank to $210/mt CFR Taiwan on Wednesday, an $87/mt drop over the last three weeks.
Pricing reached as high as $297/mt CFR Taiwan for containerized HMS 80:20 on April 27 after a six-week run-up that had suppliers on edge. Platts assessed US West Coast containerized HMS at $180-$190/mt FAS Port of Los Angeles Wednesday, down $27.50/mt on day and down $100/mt in the past three weeks.
“It is a $100 drop,” one supplier said. “This is twice as fast as it went up – it took six weeks to go up and three weeks to go down. China lowered their [billet] prices and scared everyone.”
An Asia-based scrap dealer attributed the price correction to billet pricing as well, but wondered, “what will be the resulting effect on the level of supply? Asian mills are not carrying a lot of scrap inventory.”
A US scrap supplier was relieved to finally have sales again after two weeks of not receiving bids from Taiwanese mills.
“We have a container market again at $210,” the supplier said. “We are finally back to doing business. We are still watching billet and the Chinese market for signs. The key giveaway will be when India and Pakistan come into the market.”
The supplier believes the return of India and Pakistan demand will help establish a floor on pricing. “I don’t see it breaching $200 at this point,” the supplier said. “If it does breach $200 it will be temporary.”
— Nicholas Tolomeo”