Tight supplies crimp heavy melt exports - Scrap - scrap metal industry exports
PHILADELPHIA -- U.S. exports of No. 1 heavy melting steel scrap slid nearly 30 percent in October, but industry sources said the decline probably had more to do with reduced supplies of material than any weakening in offshore demand.
Shipments of the bellwether grade of cut ferrous scrap sagged to 85,845 short tons in October, according to the latest figures from the U.S. Commerce Department, down sharply from 122,598 tons delivered to foreign ports in September.
Shipments of No. 1 heavy melt might have been lighter in October, but the companion grades took up more space aboard vessels. Exports of No. 2 heavy melt almost doubled in October to 26,710 tons from 13,727 tons the previous month, while shipments of bonus grade (5-foot plate and structural scrap) nearly quadrupled to 38,163 tons from a little less than 10,000 tons in September.
U.S. scrap exporters shipped cut scrap as well as shredded to Turkey for the second consecutive month. Turkish steelmakers took in more than 37,000 tons of No. 1 heavy melt, almost 6,500 tons of No. 2 heavy melt and close to 12,000 tons of bonus grade from U.S. suppliers in October, in addition to 68,377 tons of shredded.
October was only the second month last year that Turkish mills purchased much tonnage of cut scrap from the United States. They imported nearly 39,000 tons of No. 1 heavy melt in September, but prior to that they had bought only 52 tons of the bonus grade in April, according to the Commerce data.
Turkey's steelmakers were a leading offshore market for U.S. exporters in the past decade, especially East Coast yards. But they all but disappeared from U.S. docks in 1999, when Russia and Ukraine began to play larger roles in the international ferrous scrap market. Now, however, higher export taxes in Ukraine and Russia, along with restrictions on ferrous scrap exports, have cut the supplies that Turkish mills relied upon in recent years.
In addition, stronger demand from other overseas steelmakers has created a sellers' markets for many U.S. scrap exporters. Despite October's decline, U.S. exports of No. 1 heavy melt for the first 10 months of last year were up 33.4 percent from the comparable period of 2001 and were 53 percent higher than in the first 10 months of 2000.
The percentage gains were even stronger for the other grades of cut ferrous scrap. Year-to-date exports of No. 2 heavy melt were up by 56.4 percent from the previous year and 90 percent from 2000, while bonus grade shipments were double those of 2001 and triple those of 2000.
US Exports of No. 1 Heavy Melting Steel
(in short tons)
Year to date Percent
Oct. Sept. Aug. 2002 2001 change
Canada 2,247 1,434 1,562 12,496 9,201 +35.8
China 11,780 42,510 335 227,160 173,870 +30.6
Malaysia 0 12,578 0 78,620 84,458 -6.9
Mexico 990 3,361 10,246 89,414 30,331 +194.8
S. Korea 21,081 22,909 32,671 690,097 554,435 +24.5
Taiwan 10,227 0 66 26,757 26,184 +2.2
Turkey 37,096 38,972 0 76,068 0 --
Others 2,424 834 4,405 14,888 32,985 -54.9
Totals 85,845 122,598 49,285 1,215,500 911,464 +33.4
Source: Compiled by AMM from data released by the U.S. Commerce
Department.
