Raw Material Prices

Hoffman on scrap: Could a floor in Asia firm US prices in April?

March 28, 2024

Numerous mid-sized export yards in California and in Baja Mexico had little to no inventory on the ground last week because most had sold forward in the falling March market.

Looking to secure their margins, they dropped prices across the scale. That resulted in lower-than-normal flows. “I’m sold out through mid-April and even longer if the flow doesn’t pick up” one yard owner said. That turned out to be the position of numerous West Coast suppliers.

Meanwhile, Asian buyers attempted to drop to prices to $335/mt FAS ($350/mt CFR Taiwan) for container scrap. But by the time buyers made the $335/mt offers, most suppliers had taken orders at above $340/mt on the way down. One supplier who held out with his inventory achieved a $5/mt increase to $345/mt FAS ($360/mt CFR) Taiwan on March 26.

Meanwhile, Japanese scrap exporters/suppliers balked at the latest Vietnamese buyers’ offers. Buyers in Vietnam pushed to go below $370/mt CFR Vietnam for short-sea shipments of Japanese H2 scrap. “Suppliers are not going to accept anything less than $370,” an executive at one major trading company said.

The takeaway: It seems that the West Coast scrap export market and Asia-Pacific region are at a bottom given low flows, US West Coast suppliers short on inventory to ship existing orders, and Japanese suppliers holding firm.

Developments in Asia, combined with the latest Turkish sales in the $380s/mt, indicate that the international ferrous scrap market may be stabilizing. That will likely put pressure on the US domestic market to remain flat or to increase in some areas in April.

Phil Hoffman

Phil Hoffman has been in operations, logistics and trading ferrous scrap globally for more than 30 years. Hoffman Iron has also consulted for numerous steel mills, where he has enhanced steel mill scrap and raw material operations by successfully reducing raw material costs while increasing yields. Hoffman is in addition an attorney specializing in international trade and maritime law.