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February is traditionally a lackluster month for US steelmakers and scrap sellers and over the past decade has trended either sideways or down on a fifty-fifty basis.
US markets bucked that trend in February’s domestic negotiations versus those of January, settling up $20-35 per gross ton dependent upon grade and region.
This atypical upswing, coupled with ravenous appetite from Turkey in January — regional mills imported a staggering 41 cargoes in the month, 18 of which were from the US — may well have spurred further upward momentum for US export.
But the initial expectation that Turkish mills would import a further 20 global deep-sea ferrous scrap cargoes over the course of February may not come to fruition following Monday’s earthquakes in the country’s Iskenderun region.
Mills in the major steelmaking hub declared force majeure following the incident while the port of Iskenderun has closed after incurring damage; the immediate future of inbound shipments to the port is now uncertain.
US exporters are mulling the possible effect on the market, with one such source stating that this could either be negligible or lead prices to fall. Either way, it is expected that Turkey will remain out of the market for the remainder of the week ending Friday, February 10.
Turkey is the largest exporter of rebar, which is vital to the construction sector and uses heavy melting scrap and shred. Prices for these grades had only recovered $3-5 per tonne above early-January levels in the last-reported US deep-sea sale to the region despite huge export volumes that month.
There is some hope, however, that Indian buyers may return to the US export market to secure tonnages that may have otherwise gone to Turkey, one export source said.
Indian buyers made their presence felt in the latter half of 2022, buying deep-sea ferrous cargoes — particularly of shred — from the West Coast. The country’s increasing need to fulfil an ambitious infrastructure program has been well documented over the period.
Dock prices in certain parts of the East Coast rose in the week to Monday, February 6, with increased domestic prospects and a month of successive cargo exports to Turkey leading exporters to pay more for tonnages. West Coast prices are expected to follow suit.
To keep up to date with steel market updates and to follow steel price movements throughout the year, visit our steel and steel raw materials page.