|Improved broad-based demand from global steelmakers significantly boosted ferrous scrap exports from the United States in 2018, successfully offsetting lower annual shipments to Turkey.
Ferrous scrap exports as a whole rose by 15.7% year on year in 2018 despite a 5.6% drop in deliveries to Turkey, according to US Census Bureau data. This was due to increased sales to various export markets worldwide, particularly those in Asia.
Turkish mills received significantly more No 1 heavy melting scrap (HMS) than shredded scrap from US suppliers in 2018. HMS 1 exports to Turkey totaled 1,537,939 tonnes last year, up by 4.8% from 1,467,024 tonnes the prior year. Meanwhile, shredded scrap exports to Turkey fell by 12.9% to 1,239,079 tonnes from 1,422,258 tonnes.
Unlike US domestic scrap prices, ferrous scrap export prices ended 2018 lower than at the start of last year.
Fastmarkets AMM's weekly East Coast ferrous scrap export index for heavy melt averaged $302 per tonne fob New York for the week ended December 28, 2018, down 13% from its average of $347 per tonne fob New York the week ended January 5, 2018. The index currently stands at $297 per tonne.
US ferrous scrap shipments to Vietnam rose by 55.3% to 1,022,306 tonnes from 658,264 tonnes in 2017, while deliveries to Indonesia and Malaysia more than doubled to 447,102 tonnes (from 137,988 tonnes) and 527,052 tonnes (from 229,967 tonnes) respectively. Indonesia took in 245,740 tonnes of shredded scrap and 65,503 tonnes of HMS 1 while Malaysia received 218,159 tonnes and 124,427 tonnes of the two scrap grades respectively.
Steelmakers in Hong Kong and Japan also showed increased appetites for US material. Volumes to these two countries rose by 86% and 57.7% to 123,058 tonnes (from 66,147 tonnes) and 138,239 tonnes (87,687 tonnes) respectively.
South Korean and Taiwanese mills increased their US scrap intake by 68.2% and 44% respectively in 2018, at 898,740 tonnes and 1,971,776 tonnes. Shipments of shredded scrap to South Korea and Taiwan rose significantly to 329,431 tonnes (from 178,471 tonnes) and 300,272 tonnes (from 123,991 tonnes) respectively.
Meanwhile, annual exports of ferrous scrap to Canada rose by 52.8% due to increased shipments of stainless scrap and alloy scrap, which spiked to 387,384 tonnes from 131,064 tonnes, and 392,832 tonnes from 178,438 tonnes. Exports of unspecified ferrous scrap to Canada rose by 25.9% to 366,699 tonnes from 291,238 tonnes.
Mexican mills raised their intake of US scrap by 9.2% in 2018. Shipments of HMS 1 to Mexico increased by 32.6% to 951,115 tonnes from 717,019 tonnes, and shipments of shredded scrap rose by 33.3% to 407,065 tonnes from 305,367 tonnes.
Shredded scrap remained the most popular scrap export grade with 5,682,770 tonnes shipped globally, up by 6.7% from 5,327,258 tonnes in 2017. Meanwhile, HMS 1 exports jumped by 21% to 5,266,946 tonnes from 4,325,480 tonnes.
On a monthly basis, December exports - booked in November - were down by 14.8% as steelmakers in several major destinations reduced their purchases of US material. Volumes to Turkey, Mexico and South Korea were off by 32.6%, 32.5% and 36.6% respectively versus November.
The return of mills in Egypt, Greece and Kuwait to the US export market in December, along with an 18.9% month-on-month increase in exports to Taiwan, failed to make up for the shortfall caused by the reduced presence of Turkey, Mexico and South Korea collectively versus November.