US domestic scrap prices, which are expected to settle this week, are likely to follow the ballooning trend seen in the international market amid Russia’s invasion of Ukraine.
Even prior to Russia’s attack, the US market was bullish for March trading, following three consecutive months of declines, but expectations have now exploded as the war in Ukraine is disrupting pig iron shipments from the CIS.
Scrap prices in Turkey increased by more than $120/tonne throughout last week. Turkish mills are receiving steel demand from markets normally served by CIS mills and have therefore increased their scrap requirement, with April-shipment bookings still unfinished. This, coupled with the interruption to CIS pig iron supply, caused scrap prices to jump last week.
Although no bookings from the US are heard, US suppliers are seen targeting to sell at above $650/tonne cfr Turkey.
A US exporter tells Kallanish: “Today’s price will not be valid tomorrow. I am hearing an EU-origin HMS 1&2 80:20 booking at $640/t cfr [Turkey]. If I can confirm this, maybe we will come with $680/t tomorrow. The market is changing by the hour.”
A US domestic supplier says: “Last week we were talking about domestic [scrap] price increases of around $30-40/gross ton. But today, I think prices will rise more than $100/gt. For prime grades, even more.”
One US exporter is heard to have cancelled its shipment to a mill in northern Turkey as the Ukraine war has impacted the Black Sea. There are talks that the vessel will be directed to another mill located in southern Turkey. Some vessel owners are also seen avoiding sailing to the Marmara region.
Later on Monday afternoon, there was a rumour of a US-origin scrap deal being done at $678/t cfr Turkey, though this was rejected by most US suppliers.
Export prices from the US West Coast also increased last week. In Taiwan, offers for HMS 1&2 80:20 container scrap from the US West Coast have increased to above $515/t cfr. Although the market remains bullish over near-term pricing, instability and uncertainty are troubling all market players.
Burcak Alpman Turkey
