Ferrous scrap export prices remain firm amid tight supply, elevated freight costs

• US domestic market slows amid planned mill maintenance shutdowns
  
  
• Weak steel demand, cautious sentiment limit fresh scrap bookings
  
  

Global scrap export markets remained largely stable to firm during the week ended 15 May, supported by elevated freight costs, tight supply conditions, and firm collection prices across the US, EU, and Brazil. However, weak finished steel demand and cautious mill buying continued to limit stronger trading activity and price gains.

US scrapexport prices remained largely stable w-o-w, with HMS 80:20 at $379/t FOB and shredded scrap at $399/t FOB. Export sentiment remained relatively firm amid elevated freight costs and tight supply conditions, although weaker Indian buying interest and cautious Turkish mill demand limited stronger price gains.

US domestic scrap negotiations remained slow during May amid planned mill maintenance shutdowns. Cleveland busheling prices increased by $20/t to $475/t delivered, while Chicago HMS prices declined by $10/t to $365/t. Shredder feed prices also softened slightly across major US regions.

US-origin HMS 80:20 prices to Turkiye were heard at $413/t CFR, down by $1/t w-o-w, while Vietnam prices declined by $5/t to $402/t CFR, and Bangladesh prices eased by $2/t to $410/t CFR.

EU scrap export prices remained firm in the week ended 15 May, supported by elevated freight costs, firm collection prices, and a stronger euro, although overall trading activity stayed limited due to subdued demand from key import markets.

Rotterdam HMS 80:20 prices increased to around $377/t FOB, while UK dockside HMS 80:20 prices remained stable at EUR 305-310/t ($355-361/t).

Italian export offers were heard at EUR 350/t ($408/t) FOB for E2 (HMS 90:10), EUR 355/t ($414/t) FOB for E8 shredded scrap, and EUR 320-340/t ($373-396/t) FOB for E3 (HMS 80:20).

Brazil's ferrous scrap market remained largely stable in the week ended 15 May, although higher diesel costs and PIS/Cofins-related uncertainty continued pressuring recyclers' margins. Market participants noted that uncertainty surrounding Brazil's federal fuel and revenue-linked taxes (PIS/Cofins) continued increasing transportation and collection costs, tightening recyclers' operating margins and limiting downside pressure on domestic scrap prices despite cautious mill buying sentiment.

Domestic HMS 80:20 prices were heard around BRL 840-850/t ($168-170/t) FOT, turnings near BRL 760-770/t ($152-154/t), and clean steel scrap around BRL 925/t ($185/t). Export prices also stayed stable w-o-w, with HMS 80:20 at $310-315/t FOB and shredded scrap at $330-335/t FOB Brazil.

Outlook

Global scrap export markets are expected to remain firm, supported by high freight costs and tight scrap availability, although weak steel demand in key importing markets may continue limiting fresh bookings. Market participants are expected to closely monitor Turkish deep-sea bookings, Chinese billet export trends, and currency movements across key importing regions for clearer market direction. Any further increase in freight or energy costs could continue limiting downside risk for scrap export prices.