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| USA's Domestic Scrap Market On Track To Rebound |
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The USA's domestic ferrous scrap market is on track to rebound as evidenced by moves this week for an increase of around US$50/LT in ex yard prices, according to information made available in Tokyo. There are strong expectations among local metal merchants for new purchases of US ferrous scrap by Turkey's electric steelmakers after Ramadan. Ramadan is the month of daytime religious fasting in the Islamic calendar. In the first week of September, Turkish electric steelmakers bought ferrous scrap cargoes from the US East Coast. Negotiated prices are said to have stood at levels of US$420/MT C&F for a mix of 80% No1 HMS/20% No2 HMS and US$425/MT C&F for the shredded grade. In the USA, local transaction prices of ferrous scrap already hit bottom on the West Coast last week. Ex yard prices there have recovered to a level of US$300/LT for No1 HMS this week, up from the earlier level of US$270-280/LT. It is understood that ex yard arrivals of material fell off in the wake of a steep fall in prices. It looks as if ex yard terms are under correction of low prices. As a result, there is a strong possibility that transaction prices will go up in new ferrous scrap exports out of the USA to Asian destinations. Of late, a total of 7-8 ferrous scrap cargoes from the US West Coast are said to have sold at a price level of US$430-440/MT C&F South Korea for No1 HMS. The Korean buyers concerned are seen as Hyundai Steel Co, Dongkuk Steel Mill Co, Korea Iron & Steel Co, and Yamato Korea Steel Corp. What the Korean buyers have agreed to pay this time amounts to a low of prices in US ferrous scrap exports to East Asia, market sources point out. As a result, there are forecasts that transaction prices will move up in Korean purchases of US ferrous scrap next time. A price of US$430/MT C&F South Korea for US No1 HMS translates into a level of Y46,300-46,400/MT C&F, market sources estimate. Meanwhile, the sales price of Japanese No2 HMS for Hyundai Steel was Y45,000/MT C&F at the beginning of this week. As a result, it follows that the status of Japanese No2 HMS as low-cost material is thought to have lost in comparison with US No1 HMS, given quality differences. In Japan, pricing leader Tokyo Steel Mfg Co raised what the company pays for locally available ferrous scrap by Y2,000-3,000/MT at its four works from Sept 11. In this connection, chances are Japan's trading houses will have to increase offer prices by at least Y3,000/MT in their deals of ferrous scrap exports to South Korea. But it is unlikely that South Korean electric steelmakers will take action to import Japanese ferrous scrap such as No2 HMS, market observers believe. |
| last modified : Thu 18 Sep, 2008 [11:06] |
