Robust Steel Mill Demand Revitalized U.S. Ferrous Scrap Export Markets

SEATTLE (Scrap Monster): The steel mills in Mexico and South America have set U.S. ferrous scrap export markets on fire. The mills, aided by ramp up in production, are seen outbidding Turkish buyers, said Nathan Fruchter, a New York-based trader and consultant. The supply constraints during spring season also boosted demand. Incidentally, the U.S. market is witnessing inadequate supply in several parts, especially due to winter weather conditions and holidays.

According to Fruchter, several Turkish buyers have shifted to lower priced European and Black Sea markets. However, Central and South American mills do not have this option. As a result, they are willing to buy scrap from the U.S., by paying $20-$30 per ton in excess, in order to ensure supplies to furnaces that have started showing signs of renewed production surge.

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The Latin American buyers, mainly from Mexico, Peru, Ecuador and Brazil have converged on the market during the previous month. This is a clear indication that the economies as well as the steel sectors in these countries have rebounded from Covid-19-induced shutdowns. Many of these countries face abundant shortage of domestic scrap, thus making them necessary to look to the U.S. to meet their rising scrap requirement.