The US scrap market is still slow and quiet with prices continuing to trend downward.
The gloomy global economy is still the main force that is negatively impacting the steel market, and it does not seem like the world's economic conditions will improve anytime soon. As a result of the sluggish finished steel product market, as well as the declining scrap export demand, sales of US scrap, both domestically and exports, are generally very quiet. There are hardly any scrap transactions to be seen on either the domestic or the export side. However, due to the slow scrap collection activities, a large price decrease for domestic scrap is not expected in the near future. Prices have softened by approximately $5 to $10 /long ton (lt) in February so far.
Currently, East Coast busheling scrap prices range from $225 to $235/lt. Shredded scrap is sold for $215 to $225/lt, while HMS I prices are at the level of $190 to $200/lt.
On the export side, prices and sales activity are also trending slightly down, especially for shipments to the US' number one export scrap destination, Turkey. However, the latest scrap export data show an up-tick in December shipments due to a brief period of restocking that Turkish mills underwent late last year. The latest USITC data show that the total amount of ferrous scrap exports from the US in December 2008 was 1,224,000 mt, reflecting an increase of 340,000 mt when compared to the figure of 884,000 mt in November 2008.
The top recipients of shredded scrap from the US in December 2008 were: Turkey, at 217,000 mt; China, at 163,000 mt; and India, at 128,000 mt. Some other countries which imported shredded scrap from the US in December include Pakistan, Switzerland, Thailand, Taiwan and Egypt.
For HMS I grade scrap, the top recipients of US exports in December 2008 were: Turkey, at 246,000 mt; China, at 112,000 mt; Egypt, at 20,000 mt; and Taiwan, at 18,000 mt. Egypt, Indonesia, Thailand and Switzerland also imported some tonnage of HMS I grade scrap from the US during the period.
China has been absent from the top of the statistics for the last couple of years, but since Q4 of 2008 China's scrap buying activity has increased. Chinese steel markets are faring better than most other major markets, and Chinese mills have sped up their scrap buying from the US even further since the beginning of 2009. This has helped soften the downward trend of US scrap export prices despite the European and Middle East scrap demand remaining subdued.
Despite the disappointing finish, scrap exporters do not have too much to complain about as regards the 2008 export levels -- The total amount of US scrap exports in the year of 2008 was 16,290,000 mt, representing an incredible increase of 48.2 percent when compared to the figure of 10,995,000 mt in 2007.