Export activity of US scrap collectors is at its height now. Suppliers intend to take full advantage from buying activity in foreign markets and sell leftover of their ferrous scrap with maximum profit.
As a result, HMS 1&2 (80:20) is available from ports of US east coast at $475-480/t FOB against $445-450/t FOB in late December. Shredded scrap is currently quoted at $480-485/t FOB, $30/t up from the end of December.
Quotations of higher-quality P&S material have also reached new highs – $485-490/t FOB east coast, $25/t up in two weeks. HMS 1&2 (70:30), which is least in demand, is offered at $470-475/t FOB against $440-445/t FOB in late December.
US traders believe that export quotations of scrap will keep growing until late January, as new contracts with foreign buyers are expected.
Demand for the material is high also in the US domestic market. This week steelmakers have raised their purchase prices by $60-70/t, striving to buy local scrap, while its supply is falling rapidly. Some producers need the material to fulfil orders for finished products so much that they are forced to import it from Europe.
Besides, the market fever gets stronger because steelmakers, who regularly use pig iron for production, now have switched to scrap, as with current quotations for finished products purchasing the former has become no longer feasible after its prices added $60/t.
Average market price for HMS 1 has added $60/t in two weeks, reaching $435-440/t delivered in mid-January. HMS 2 is sold at $370-375/t delivered now, against $310-315/t delivered last week.
Quotations of local scrap have also resumed growing in the US east coast. Prices for HMS 1 have leaped by $80/t on average in a week, to $430-435/t delivered, and those for HMS 2 have gained $75/t, reaching $320-325/t delivered.
Domestic prices for ferrous scrap are expected to keep growing in the USA not only in January, but in February too. US steelmakers will continue to raise purchases in view of a gradual recovery of buying activity in the finished products segment. Steelmaking capacity utilization in the US is forecast to grow from current 70-71% to 73% in February.
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