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US steel scrap dealers seek export options after domestic letdown

Pittsburgh (Platts)--13 Sep 2017 738 pm EDT/2338 GMT


In the wake of a disappointing September market, some US ferrous scrap suppliers were weighing their options on Wednesday and exploring sales to the coasts for export.

Bulk prices are slipping for delivery to Turkey and container demand is off in India, but overseas options remain for US scrap suppliers, some of which are currently more attractive than domestic offers.

"Pakistan is OK, buyers there want to buy [containerized shredded scrap] at $320/mt FAS [East Coast], which is way better than" the domestic price, one supplier said.

A $320/mt price for shredded scrap tops prices of $320/lt or $315/mt on a delivered mill basis paid by mills throughout Ohio and in South Carolina, the highest prices reported in the US so far in September.

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"Containers are the way to go," one domestic broker said. "A lot of dealers on the coast are trying hard to get all they can sold [to export terminals.]"

During the September buying period last week, expectations of increases of $20-$40/lt quickly unraveled into sideways markets in most US regions. A majority of suppliers sold into the domestic market, some aggressively, but others diverted tons to the coasts.

"Most dealers I spoke with sent all of their cut grades, as expected, to the docks," one Northeast supplier said. "We put two export packages [of scrap] together, it just made more sense to do. I keep telling dealers to sell export. The more material that leaves will be better for the [domestic] market. Bulkers will make more sales and [the domestic market] will need material."

Another Northeast supplier sold only minimal tonnage to US mills to maintain relationships, but diverted a majority of tonnage to the export docks.

Since the September buy week wrapped up, there have been two US bulk sales to Turkey. On September 8, there was a sale at $355/mt CFR Heavy Melting Scrap 80:20 basis and $360/mt CFR shredded basis sale and on Tuesday another US East Coast bulk sale was done at $5/mt below the September 8 sale at $350/mt CFR HMS 80:20 basis and $355/mt CFR shredded basis.

The daily S&P Global Platts US East Coast shredded scrap assessment slipped $5/mt on Wednesday to $334/mt FOB, but remained above the Midwest shredded scrap assessment of $305-$320/lt, or $300-$315/mt.

In addition to Northeast dealers who were selling to the coasts, Midwest dealers were also exploring export options.

Prices for Midwest HMS I were reported at $300-$305/lt delivered East Coast dock from as far west as Indiana. Export terminals on the East Coast raised their offer prices by $10-$15/lt to draw in material from the Midwest. In Chicago, an exporter was paying $270/lt loaded barge for HMS I to ship down river for New Orleans export cargoes.

--Nicholas Tolomeo, nicholas.tolomeo@spglobal.com

--Edited by Keiron Greenhalgh, keiron.greenhalgh@spglobal.com



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