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by - 4/29/2016 6034 Views

How Long Will The Upward Momentum Last?

An unbelievable hike in export prices of ferrous scrap rocked the market this week, leaving many market players reeling in its wake just ahead of May.

A single bulk cargo sale off the East Coast to Turkey in the past seven days was made at $32.50-per-ton higher than the prior deal on April 18. This booking was for 15,000 tonnes of an 80/20 mix of No. 1 and No. 2 heavy melting scrap at $312.50 per ton c.f.r., 18,000 tonnes of shredded scrap at $317.50 per ton c.f.r., and 1,000 tonnes of bonus-grade scrap at $322.50 per ton c.f.r. “The $312.50 deal blew me away,” an East Coast exporter source said, echoing the sentiment of many players on the East and West Coast. In late February, bulk prices were at $177 (per ton delivered).

Turkey’s international bulk transaction prices remained firm as on 26th of April as the country's producers purchased cargoes on an 80/20 basis from a Baltic exporter and a northern European exporter at prices similar to the new high achieved by the U.S. exporter. But market players are expressing a mixed opinion, as they attempt to pinpoint the factors supporting the rocketing prices of metal scrap that have caught many off guard.

A second East Coast exporter sees the momentum is a confluence of domestic and international factors. He says “You’ve got the tariffs that went into effect the first part of the year, so the local flat-rolled guys are very busy right now.” The exporter said. “Looking at Turkey, the lack of billets going into the country, the export tariffs on Romanian and Russian scrap, business is quite good in Turkey right now, and there is not a lot of scrap out there.”

Turkish domestic reinforcing bar prices rose as much as $30 per ton last week, alongside those of other raw materials like iron ore and scrap. The publication ‘Steel First’ assessed the price at $475 to $480 per to which portrays an up from $450 to $465 per ton previously. Turkish mills raised tags last week due to higher raw material costs and lower product inventory despite slowing demand.

It is anyone’s guess how long the upward momentum will last. In early March, some market players believed that the price rally would last for only about 2 months. However, the current market conditions indicate that this trend could possibly & potentially carry on through midsummer.

Having said this, there are still some market players who remain wary of the pace at which prices have increased. “There’s a kicker here,” a West Coast exporter cautioned. “What goes up always comes down, and when it does (prices) may do so just as fast as (they) went up.”

Meanwhile, containerized scrap prices on the West Coast were increasing on a daily basis as Taiwanese mills continued to seek material. Containerized 80/20 heavy melt in the Los Angeles area was being sold at $285 to $290 per ton f.a.s. April 26, sources indicated & with offers heard as high as $320 per ton delivered.

However, Taiwanese mills are resisting metal scrap purchases at the $300 level, bringing the price range down to between $270 and $280 per ton f.a.s. April 27 ;"(they) appear to be testing the market,” second West Coast exporter said.

A third West Coast exporter opined that, “Right now, if you offer $290 (per ton) delivered to Taiwan they will grab it, but that’s too cheap.” He goes on to say, “I had inquiries (April 26), but I refuse to make an offer until domestic (prices) settle and I can see what everyone else is doing.”

Category : Metal

Tags : Ferrous Scrap, Ferrous Scrap Market, Ferrous Scrap Price, Ferrous Scrap Trading

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About Georgy Abraham

As the bright morning of 28th May dawned in the year 1972, in the fulfillment of time according to the plan & will of Almighty Godbrought me forth into this world and I was brought up & educated in Orissa. My parents provided me with the best of education in an English medium school with high standa .... more info


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