Posted on 31 Jan 2023
Approaching February trading, sentiment has turned more bullish in the US scrap market, Kallanish notes.
Domestic scrap prices are likely to find support from growing demand, ongoing supply issues and improving prices in the largest export destination, Turkey.
Although some market players still doubt further price rises and find a sideways trend more likely, most seem to be preparing for higher prices during February trading.
Nevertheless, neither side seems to expect a decrease in prices.
On the US West Coast, activity was almost nil in Taiwan last week as mills were shut for the Lunar New Year holiday. The latest deals for US-origin containerised HMS 1&2 80:20 stood at $405/tonne cfr Taiwan at the end of the previous week. Although the market was slow on Monday, offers are expected to rise above $415/t cfr Taiwan levels this week amid the bullish sentiment in the global scrap market.
On the East Coast, numerous scrap bookings were heard in Turkey last week. Although US-origin HMS 1&2 price stood at below $410/t cfr Turkey on the week’s early bookings, it increased to $416-418/t cfr levels on deals concluded towards the end of the week.
Scrap suppliers are seen targeting higher levels this week amid positive developments arising from China’s strong return from holiday. Also supportive are the decrease in Turkish mills’ energy prices and strong Turkish flat steel prices, which have found even further support from the increase in import duties last weekend.
Although scrap suppliers have increased their price targets to above $425-430/t cfr Turkey this week, it is still questionable if the higher values will find support from steel prices. Turkish flat steel producers may be enjoying the increases in flat steel import duties and preparing for price hikes, but long steel producers are still struggling to sell rebar at $715-730/t ex-works levels.
Source:Kallanish
