Fastmarkets’ assessment of the discount for copper scrap No1 copper, delivered to brass mill US remained at 7-10 cents per lb on Wednesday, flat since June 7. 

Fastmarkets’ assessment of the discount for copper scrap No1, delivered to refiners was also stable at 10-13 cents per lb on November 22, flat since October 4.

A second source also said that the market is “very quiet” with “no changes to spreads.”

Discounts to brass ingot makers were a bit more mixed on the week.

Fastmarkets’ assessment for the copper scrap No1 bare bright discount and No1 copper discount, delivered to brass ingot makers held at 4-6 cents per lb and 18-21 cents per lbs on Wednesday, respectively. 

The unchanged prices come amid new fluctuations on the Comex. The most-active December delivery Comex copper contract fell day on day to $3.763 per lb on November 22, but was up week on week from $3.7185 per lb on November 15. The price had risen to a weekly high of $3.814 per lb on Monday November 20 before declining again. 

Brass prices were also unchanged, though a brass source said prices had tightened slightly in the beginning of the week amid the upward pressure from Comex prices and export demand.

Fastmarkets’ assessment for No1 comp solids, delivered to brass ingot makers remained at $2.86-2.90 per lb on November 22, flat from the previous week.

Prices for copper scrap radiators, delivered to brass ingot makers also held at $2.34-2.37 per lb on Wednesday, stable from the previous week.

One buyer noted that “for the most part, [prices are] stable from last week,” and that while prices had seen some increases with the rising Comex rates on Monday and Tuesday there were largely back in line with the previous week’s assessments by November 22.

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“I think the only thing that kept the domestic market [afloat] was the export pricing in the last few years,” one source said on February 15. “Demand for 2022 has been on or off depending on the supply situation.”

Percentage-wise, Turkey, Belgium, Mexico and Thailand also made large gains, at 238.08%, 43.98%, 39.28% and 38.99%, respectively.

On the other hand, exports to Greece, Hong Kong and South Korea also decreased, by 35.22%, 32.65% and 17.02%, respectively.

“I think a lot of us expected to see China go crazy after getting out of lockdown, but it seems it is very sluggish.” the source continued.

Another source also echoed the sentiment that demand was “sluggish” in China.

Copper trade flows were suspended due to a series of Chinese policy changes leading to widespread uncertainty, but business eventually picked back up and US exports to China rose 233.78% over 2019 levels, with imports reaching 323,485 tonnes in 2022 compared with 96,917 tonnes in 2019.

In 2018, China’s State Council had announced it was working towards implementing a complete ban on imports of solid waste, including all metal scrap, by the end of 2020.

The rise of high quality copper scrap

In January 2020, the government released the list of renamed copper renewable materials, reclassifying high quality copper and brass scrap under new categories of renewable materials.

The Chinese Ministry of Ecology and Environment announced later that year that recycled copper and aluminium that met the country’s standards for renewable metals instead of solid waste could be freely imported into the country beginning in November.

At the time of the announcement, US sellers expressed wariness regarding the classification system and concerns that under the new policy, the thin line between ‘waste’ and ‘recyclable material’ was no longer determined by agencies run by the China Certification & Inspection Group (CCIC), which the industry was familiar with.

In November of 2022, the top ten copper producers in China sought to convince their government to relax scrap import standards, pledging to have recycled copper make up 25% of their total production by 2025, according to a joint statement by the ten producers.

Consumers in China have displayed a preference for overseas copper scrap over domestic material, with more consistency in quality and ease of obtaining tax rebates.

China’s market share of US exports totaled 10.07% in 2019 but has since climbed to reach 31.50% of the market share in 2022, outpacing the second highest importer of US scrap by nearly 20%.

“A lot of the time, the copper market moves on what is going on in China,” one trader said in November, prior to the lockdowns in China ending. The trader explained that with China being the biggest consumer of copper and metals in general, the country’s activity had the biggest influence on the copper market.

“If [China is] in lockdown and things are slowing down there, copper prices are more likely to go down. But if things are looking up and are not as bad as the day before, then copper prices will pick up as well,” he added.

Canada and India took the second and third largest percentages of the US market share at 11.57% and 9.23%, respectively. Both increased in 2022 but experienced some fluctuations between pre-Covid 19 pandemic 2019 and 2022.

India’s imports increased 64.11% from 2021 — up 43.59% from 2019 levels — to reach 94,803 tonnes in 2022.

Thailand also climbed, to 6.81% of the US market share, up from 2.34% in 2019, with tonnes taken in growing 210.44% since 2019, to 69,936 tonnes in 2022 — up from 50,319 tonnes the year before and 22,528 tonnes in 2019.

Mexico, Poland, Turkey and the United Arab Emirates also saw large percentage increases from pre-Covid 19 pandemic levels, with tonnage growing 208.98%, 204.74%, 163.72% and 117.11%, respectively.

Meanwhile, Malaysia’s market share has declined since 2019, despite remaining the top importer of US copper scrap from 2019-2020.

Malaysia accounted for 25.39% of US exports in 2019, but has since fallen to 7.18%, with the largest decline between 2021-2022.

The decrease has come following a 0% impurity scrap import policy that was enacted in 2022.

Malaysia’s new policy set higher restrictions than those for China, Indonesia and other scrap processing countries for major scrap import products including “ferrous waste and scrap; remelting scrap ingots of iron or steel” (HS Code 7204), copper waste and scrap (HS Code 7404) and “aluminium waste or scrap” (HS Code 7602).

While market sources did not report the policy as causing a significant impact on pricing or market activity at the beginning of the year, exports to Malaysia began falling in March, with the 2022 total reaching 73,696 tonnes, down from 167,686 tonnes in 2021 and 244,370 tonnes in 2019.

Domestic copper scrap demand

North American copper sources have noted depressed domestic demand for quite some time, with the first source saying that, “export is the only thing keeping the spreads up.”

Since the start of 2023, sources have reported both declining export demand and continued slow domestic demand, citing some widening of discount spreads for copper scrap.

For most of 2022, the copper scrap No1 copper, discount, buying price, delivered to brass mill US remained unchanged at 9-11 cents per lb, first from January 26-September 28, 2022, and then, after a brief narrowing, the discount was again steady at 9-11 cents per lb from October 12-December 14.

However, following rising COMEX levels, prices shifted at the beginning of 2023, with the discount increasing to 10-13 cents per lb before settling back to 9-12 cents per lb, where it was last assessed on February 15.

While sources in 2022 noted that price movements were more affected by changes in export levels rather than COMEX levels, the combination of low export demand and rising COMEX levels led to some movement earlier in the year.

Additionally, while export did show some gains year on year, supply/demand imbalances persist, as does market uncertainty.

Speaking at the Institute of Scrap Recycling Industries Roundtables in September, John Gross, publisher of The Copper Journal, said, “Logically one would say, if we’ve got the market in a deficit position and we’ve got inventories almost nonexistent, the price should be a heck of a lot higher than it is. So why isn’t it? That’s an open-ended question and I don’t have an answer.”

However, brass demand has been more reactive to changes in exports, with sources noting more movement and more market activity.

“Domestic [demand] has been stronger on the brass side for us,” the first source said. “Copper is just very fickle, domestically.”

Throughout the year, brass sources noted more market activity, with one source saying at the end of 2022 that they were “still going from hand to mouth,” and that “what we’re producing, we’re shipping,” even in mid-to-late December.

However, sources did indicate in the week ended February 22 that in the wake of the fire at I. Schumann & Co’s facility there could be a temporary change in where brass scrap goes.

An explosion was reported at the company’s facility in Bedford, Ohio, on Monday February 20.

One source noted that, with the possible exception of yellow brass solids, due to Schumann’s facility being offline and other ingot makers trying to pick up as much of the slack as possible, “brasses won’t be export markets within two weeks.”

Fastmarkets last assessed the copper scrap yellow brass solids, buying price, delivered to brass ingot makers on February 22 at $2.59-2.67 per lb.

The post US copper scrap exports grow as highest importing countries shift, domestic demand lags appeared first on Fastmarkets.

Fastmarkets’ assessment for aluminium scrap mixed low copper clips, buying price, delivered Midwest secondary smelters was 68-71 cents per lb on Thursday, unchanged from February 16.

The price of aluminum scrap old sheet, buying price, delivered to Midwest secondary smelters was also stable at 69-71 cents per lb on the same day.

The assessment for aluminum scrap old cast buying price, delivered to Midwest secondary smelters was similarly flat at 69-72 cents per lb.

The price for zorba 95/3 min, basis delivered US facility was also unchanged at 73-76 cents per lb, with sources noting export demand for zorba.

One source told Fastmarkets that the export markets for zorba were “still strong,” with another echoing the sentiment but noting that export demand was “starting to soften.”

Zorba prices impact non-ferrous auto shred

Sources also said that prices for zorba were affecting those for non-ferrous auto shred – also known as twitch – as well as export demand for twitch. One source indicated that “seasonal outages at shredders” were leading to “short-term tightness.”

The price of aluminum scrap non-ferrous auto shred (90% Al) buying price, delivered to Midwest secondary smelters increased to 89-92 cents per lb on Thursday, up from 85-89 cents per lb the week prior, following buying heard at 90 cents per lb and above.

Secondary aluminium alloy sources said the increased prices for scrap were impacting alloy markets, with one saying that prices for A380.1 have increased since the beginning of the year “based on zorba and twitch.”

The price of aluminium scrap turnings clean dry high grade, buying price, delivered to Midwest secondary smelters widened upward on Thursday to 56-60 cents per lb, from 56-59 cents per lb on February 16, with buying heard at the upper end of that range during the week.

One buyer said they were “trying to keep up with export,” and that it “seems the 60-cent number is getting holders to let loose units.”

Another buyer also believed that there “was still pressure on turnings,” and that it was “starting to get to the point” where margins were getting very tight.

The second buyer said that the export market is “definitely rallying,” and that “China opening back up had a lot to do with it.”

The buyer explained that even if China isn’t buying scrap directly from the US, they are buying from Malaysia or South Korea, which do take in US imports.

“If China is buying more off someone, it affects other regions,” the buyer said, adding that Chinese activity has “really picked things up a bit.”

The price of aluminum scrap turnings clean dry mixed grade (max 5% Zn) buying price, delivered to Midwest secondary smelters also increased to 49-53 cents per lb on Thursday, up from 48-51 cents per lb on February 16.

“A plethora of different people all came back into buying from overseas at the same time,” the second buyer said.

“[Over] the last three to four weeks, [we] have been hearing the same export numbers,” they added, indicating that the market “may be stabilizing a bit.”

For mill grade scrap, however, sources continued to note a lack of market activity.

“The spot activity is really quiet,” one mill source said on Thursday.

Aluminium scrap segregated low copper alloy clips 5052, mills specialty consumers’ buying price, fob shipping point US was assessed at $1.00-1.10 per lb on Thursday, unchanged from February 16.

Aluminium scrap segregated low copper alloy clips 3105, mills specialty consumers’ buying price, delivered consumers US was also unchanged at 84-87 cents per lb on the same day.

But the assessments for aluminium scrap mixed low copper clips, specialty consumers’ buying price, delivered consumer US and aluminum scrap painted siding, specialty consumers’ buying price, delivered consumer US decreased. They were assessed at 80-84 cents per lb and 77-81 cents per lb, respectively, declining by 2.96% and 4.24% from February 16.

“We are seeing a lot of destocking and inventory reduction at the mills,” a source said, but added that activity may pick up further into the second quarter.

The pricing comes amid increases in the London Metal Exchange’s three-month aluminium contract. The official session closed at $2,408 per tonne ($1.09 per lb) on Thursday, up from $2,382 per tonne ($1.08 per lb) February 16.

Fastmarkets’ assessment of the aluminium P1020A premium, ddp Midwest US was flat at 28.50-30.50 cents per lb on February 24, unchanged since February 17.

Quiet week of market activity for secondary aluminium alloys

For secondary aluminum alloys, sources noted a quieter week of market activity and prices largely steady.

“Prices are very well balanced and holding,” one alloy source said.

Fastmarkets’ assessment for secondary aluminium alloy A380.1, delivered Midwest widened downward to $1.44-1.47 per lb on Thursday, from $1.45-1.47 per lb on February 16, following sales heard done in the week between $1.44-1.46 per lb.

Several sources continued to note high input costs on Thursday, even as the price of silicon decreased on the day.

“We like seeing it come off,” one source said, referring to silicon prices, “but it still has a way to go.”

The price for silicon, ddp US was $1.90-2.60 per lb on Thursday, down from $2.20-2.80 per lb on February 16.

Other alloy prices were unchanged, with sources citing lower levels of activity, with the exception of A360.

Fastmarkets’ assessment for aluminium alloy A360.1, delivered Midwest rose to $1.87-1.91 per lb on Thursday, up from $1.86-1.90 per lb the week prior, following sales activity heard at higher levels.

The post US aluminium scrap, secondary alloy prices mixed on quieter market appeared first on Fastmarkets.

US nonferrous scrap exports increased by 2.54% to 293,826 short tons in October, up from 286,534 tons in September. For January-October, exports rose by 6.08% to 2,954,963 tons from 2,785,629 tons in the same period last year.

On a percentage and tonnage basis, zinc scrap exports continued to have the largest gains for year-to-date volumes, with exports up 316.17% to 197,308 tons in January-October from 47,411 tons in the same comparison last year. Shipments in October, however, decreased 15.30% to 9,979 tons from 11,781 tons in September.

India remained the largest importer of US zinc scrap in October at 3,102 tons, down 31.87% from 4,553 tons in September. Year to date, exports to India rose 144.52% to 37,646 tons compared with 15,396 in the first ten months of 2021.

Taiwan was the second largest importer of US zinc scrap in October at 1,680 tons imported, down 29.56% from the 2,385 tons imported in September. Year to date, exports to Taiwan increased 121.11% to 25,828 tons shipped in January-October 2022 compared with 11,681 shipped in the same period of 2021.

Spain was the third largest importer of US zinc scrap, also showing large percentage gains on a month-on-month and year-on-year basis. Spain imported 1,217 tons of US zinc scrap in October, up 187.03% from 424 tons imported in September. Imports increased 382.57% on the year, with Spain taking in 1,800 tons in the January-October period, compared with 373 tons over the same time in 2021.

Exports to Malaysia fell 40.81% month on month to 689 tons in October, but increased 1,546.24% year on year, rising to 107,878 tons in January-October 2022, compared with 6,553 tons in the same period of 2021.

Lead scrap exports increased by 10.17% sequentially to 4,345 tons in October from 3,944 tons in September. For January-October, lead scrap exports increased by 11.38% to 37,847 tons from 33,979 tons the previous year.

In the month, India and South Korea were the top importers of US lead scrap, taking in 1,714 and 1,132 tons, respectively.

Nickel exports fell 4.12% on the month to 2,976 tons in October, from 3,104 tons in September. In January-October, nickel scrap exports rose 85.46% to 24,421 tons, up from 13,168 tons in 2021.

Year to date, Canada was the largest importer of US nickel scrap at 13,754 tons January – October, up by 56.40% from 8,794 tons in 2021.

Aluminium

Aluminium scrap exports excluding UBCs totaled 152,113 tons in October, up 4.08% from 146,146 tons in September. Exports for the January-October period fell by 8.21% to 1,455,434 tons from 1,585,645 tons in the first ten months of 2021.

Malaysia was the top importer in October at 35,803 tons, down 10.02% from 39,791 tons in September. From January-October, the country imported 314,957 tons, down 26.02% from 425,758 tons in the same period in 2021. Year to date, Malaysia took up 21.64% of market share of US aluminium scrap exports, compared with 26.85% of market share in 2021.

India was second, taking in 32,113 tons in October, up 7.63% from 29,836 tons in September. For the first ten months of this year, India imported 305,065 tons, up 4.42% from 292,154 tons in January-October 2021. On the year, India took 20.96% of market share of US aluminium scrap exports, up from 18.42% of market share in 2021.

South Korea ranked third, taking in 23,688 tons in October, up 13.81% month on month. In January-October, imports also rose 12.16% to 236,298 tons in 2022, compared with 210,688 tons in the same period of 2021. In year-on-year comparisons, South Korea took up 16.24% of market share, up from 13.29% of market share in 2021.

On a percentage basis, year-to-date exports to China had the highest drop with 4,152 tons shipped in January-October, down 56.51% from 9,548 tons year on year. Imports also fell 22.10% month on month to 765 tons imported in October, compared with 982 tons in September. China’s market share for January-October fell to 0.29% in 2022, compared with 0.60% in 2021.

Meanwhile, exports to Turkey had the largest percentage increase, rising by 58.58% to 10,338 tons in January-October from 6,519 tons in the same period a year before. Exports to Turkey also increased 15.76% month on month to 191 tons in October from 165 tons in August. Market share also grew to 0.71% in the first ten months of 2022, compared with 0.41% in 2021.

UBC exports declined 9.02% in October to 35,634 tons, down from 39,167 tons the previous month. Year to date, exports of UBCs rose 36.47% to 367,620 tons from 269,379 tons in the first ten months of 2021.

India remained the largest importer of UBCs in October, despite a 20.59% decrease month on month. The country took in 12,895 tons of UBCs in October, down from 16,238 tons in September. Year to date, India’s imports increased 38.97% to 132,503 tons in January-October 2022, from 95,345 tons in 2021.

Mexico surpassed Malaysia to be the second-largest UBC importer, accepting 6,134 tons in October, up 9.67% from the 5,593 taken in September. Year to date, Mexico’s imports of UBCs have climbed exponentially to 56,269 tons taken in January-October, up 461.17% from 10,027 tons in 2021.

Malaysia was the third-largest UBC importer, with the country accepting 5,685 tons in October, down 11.34% from 6,412 tons in September. Year to date, imports to Malaysia increased 2.68% to 46,517 tons in January-October, compared with 45,303 tons in the same period of 2021.

Copper

US copper scrap exports totaled 88,779 tons in October, up 7.75% from 82,392 tons in September. Shipments for the first ten months of the year also increased by 4.34% to 872,333 tons from 836,047 tons in 2021.

Shipments to China, the biggest buyer of US copper scrap, rose 21.47% to 27,632 tons in October, up from 22,748 tons in September. On a year-to-date basis, deliveries to China rose by 28.44% to 269,275 tons from 209,646 tons in January-October 2021. China’s market share also grew in the year to 30.87%, up from 25.08% during the first ten months of 2021.

India was the second-leading destination, importing 10,658 tons of copper scrap in October, up 3.31% from 10,317 tons taken in September. US copper scrap exports to India increased 78.39% in year-to-date volumes, to 82,188 tons in January-October from 46,073 tons in the same period of 2021. India’s market share similarly increased to 9.42% in 2022, up from 5.51% in 2021.

Canada came in third, with 9,846 tons imported in October, up 14.06% from 8,632 tons imported in September. Canada imported 100,996 tons of copper scrap in the first ten months of 2022, down 6.17% from 107,638 tons the year before. Over the same period, Canada’s market share percentage dropped to 11.58%, from 12.87% in 2021.

Year to date, Malaysia had the biggest percentage decrease in imported tons. For January-October, the country imported 61,430 tons, down 58.43% from 147,781 tons in the first ten months of 2021. Malaysia’s market share in the same period also declined by more than 10%, reaching 7.04% in 2022, compared with 17.68% in 2021.

Turkey continued to have the highest year-on-year increase, with 3,417 tons imported in the first ten months of 2022, up 319.26% from the 815 tons taken in the same period in 2021. Turkey’s market share saw a small percentage increase, with the country taking 0.39% of US imports in 2022 compared with 0.10% in 2021.

Imports to the United Arab Emirates also exponentially increased in October, with the country taking in 1,041 tons, up 515.98% from the 169 tons taken in September. Year-on-year, imports to the UAE increased by 27.55%, and the percentage of market share increased to 0.73%.

Prices

Aluminium UBC prices decreased in September when exporters booked their tonnages for October.

Fastmarkets’ assessment of the aluminium scrap used beverage cans, domestic aluminium producer buying price, fob shipping point US began September at 74-78 cents per lb and fell to 68-72 cents per lb during the month. The price was last assessed at 73-78 cents per lb on December 8.

Fastmarkets’ assessment of the copper scrap No1 bare bright, discount, buying price, delivered to brass ingot makers remained unchanged in September, spending the entire month at 8-11 cents per lb. The discount was last assessed at 8-12 cents per lb on December 7.

Fastmarkets’ assessment of the lead scrap whole batteries buying price, delivered smelters US declined in September, starting the month at $23-25 per hundredweight and ending at $19-22 per cwt. The price was last assessed at $20-24 per cwt on December 13.

Fastmarkets’ assessment of the zinc scrap new zinc clippings buying price, delivered smelters US saw a slight decrease in September, starting the month at 88-91 cents per lb and ending at 86-89 cents per lb. The price was last assessed at 86-90 cents per lb on December 13.

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The post US nonferrous scrap exports rise October vs September appeared first on Fastmarkets.

In this article, Fastmarkets experts look at that and eight other market-changing events that have influenced global scrap markets from Chennai to Arkansas.

1.      Changes in export scrap flows: East vs West

Bangladesh and India have increasingly rivaled Turkey for deep-sea steel scrap from around the world, driven by strong Indian local demand and a lack of containers.

Currency swings meant Turkish mills are less competitive in the import market. The Turkish lira dropped 50.4% in its value against the US dollar year on year in the second week of October 2022. Over the same time, the rupee lost 9% against the dollar, with the Bangladeshi taka down 16%.

The premium for Fastmarkets’ price assessment for steel scrap HMS 1&2 (80:20) deep-sea origin import, cfr Bangladesh, over the assessment for steel scrap HMS 1&2 (80:20) North Europe origin, cfr Turkey averaged $54 per tonne in October 2022. The highest premium this year was $74 per tonne, which came in June.

Due to freight costs, exporters need at least a $50-per-tonne premium to be attracted to sell bulk scrap to Bangladesh or India over Turkey, according to sources.

2.      Turkish producers face a cost crunch

The spread between Turkish scrap import price and rebar export price has widened in the last two years, owing primarily to the country’s rising energy costs.

With effect from September 1, the cost of electricity for industrial use in Turkey increased by 50%, while the cost of natural gas increased by 47.6-50.8%.

Since the beginning of 2021, the cost of electricity has increased by more than 400%, while natural gas prices have increased by nearly 780%.

As a result, the country’s mills have had to raise their finished steel prices accordingly.

In October, the monthly average of Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar) export, fob main port Turkey, was $677 per tonne, while the daily index for steel scrap HMS 1&2 (80:20 mix) US origin, cfr Turkey, was $367.70 per tonne.

This puts the monthly average of the scrap-to-rebar spread at $309.30 per tonne in October 2022, up from $226.43 in January 2022 and $177.93 in January 2021.

According to Ugur Dalbeler, vice president of the Turkish Steel Exporters’ Union and chief executive officer of steelmaker Çolakoglu, recent increases in energy costs add $25 per tonne to steelmaking costs in Turkey for electricity and another $15 per tonne for natural gas.

As a result, Turkish steel will be less competitive in export markets, he says.

“Steel production costs have increased by $40-50 per tonne, and this must be reflected in the end-product price, even though there is no demand,” a Turkish trader said. “If slab and billet users were more rational, they would switch to [using semi-finished steel] or reduce their output of [steel products].”

3. Bangladesh HMS bulk vs container

More steel scrap buyers in both Bangladesh and India have been pushed into the deep-sea bulk market this year due to more appealing pricing. High container freight costs, together with high Indian local scrap prices, have elevated containerized scrap prices above those for bulk since May 2022.

The overall share of bulk buying in Bangladesh is currently around 70% vs 30% in containers compared with 53% in bulk and 47% in containers in the period from July 2019 until June 2020, according to major mill BSRM.

The premium for Fastmarkets’ price assessment for steel scrap HMS 1&2 (80:20) containerized import, cfr Bangladesh, over the assessment for steel scrap HMS 1&2 (80:20) deep-sea origin import, cfr Bangladesh averaged $26 per tonne in October 2022.

As recently as March 2022, the deep-sea HMS 1&2 (80:20) in the country was averaging $69 per tonne above the containerized price for the same grade.

4.      Japanese prime scrap premium slides

2022 has seen a consistent slide in the Japanese prime scrap premium amid weak demand for special steel bars in key export markets such as South Korea and Taiwan, together with increased generation due to rising Japanese automotive production. The spread has also dropped amid a tighter supply of H2 from waning Japanese economic activity.

The premium for Fastmarkets’ price assessment for steel scrap Shindachi bara export, fob main port Japan, over the assessment for steel scrap H2 export, fob main port Japan, fell to ¥3,188 ($22) per tonne in October, down from September’s ¥3,825 and to the lowest level since October 2020. The highest spread this year was in January, with ¥7,250 per tonne.

The low premium theoretically makes Shindachi more affordable for consumers, but there are roadblocks to export purchasing. For example, strike action at key Shindachi importer Hyundai over the last month continued to squeeze demand for the grade, according to market participants.

5. Busheling-shredded scrap puzzles US participants

The spread between No 1 busheling and shredded scrap in the US has also been on a wild ride in 2022, with participants wondering when the markets will normalize.

The market is upside down, with shredded scrap selling at a $30 per gross ton premium to No 1 busheling in Chicago, which is odd since busheling has a higher yield and is a cleaner scrap.

In Chicago, No 1 busheling is selling for $355 per ton, compared to shredded scrap, which is selling for $385 per ton.

Compare that to April 2022, when No 1 busheling in Chicago sold for $760 per ton, which was a $145 premium to shredded scrap that was selling for $615 per ton.

With shredded higher priced than busheling, either busheling must increase more than shredded or shredded has to decrease more than busheling.

A seller into the Chicago area said markets are still in correction territory, so he suspects shredded is overpriced and is facing the fate of a bigger drop to restore the normal $25 to $40 per ton spread between the grades.

“Shredded is higher priced to other grades and mills are pushing for more busheling because of the price of shred,” said the seller into Chicago.

“Shredded is more vulnerable than prime (No 1 busheling). There will be pushback but shredded will move lower to restore the spread. Prime has to reverse course to become higher and it is my experience that the prime-shred inverse lasts 4 months, and we are about there,” added the seller to Chicago.

A mill agent in the Arkansas-Tennessee region said he is reconsidering his monthly melt requirements since busheling has fallen under shredded scrap. He typically buys less busheling than shredded but said it may make sense to load up on No 1 busheling.

One caveat facing the return of No 1 busheling selling for a premium is that it remains in oversupply. It would take a couple months of mills melting more busheling than shredded to eat up the overhang of busheling.

A second seller into Chicago said he is facing trouble selling material. “I am having a hard time selling busheling because one producer doesn’t want it and a second producer’s offer is too low to eke out any profit.”

6. US busheling powers above pig iron

An inversion of traditional price spreads was a common theme in the steel raw material markets in 2022.

The historical delta between pig iron and US No 1 busheling was one such relationship flipped on its head after a conflict between Ukraine and Russia sent US domestic steel mills scrambling for quality grades of scrap to offset the supply shortages — forcing prices of busheling to trade at a premium to the traditionally more expensive pig iron.

As the war intensified in the early part of the spring, supplies of pig iron from Russia and Ukraine were choked off. Shipments from the region are critical for US buyers as they account for around 61% of imports into the country.

Mills scurried to Brazil to buy whatever pig iron they could, but Brazilian pig producers did not have additional availability — tightening the pig iron market and, in turn, making higher-yielding scrap grades like No 1 busheling more valuable.

With demand surging, the Chicago market for No 1 busheling shot up an unprecedented $190 per gross ton on March 9 from the month prior to $685 per gross ton. At the same time, pig iron prices were increasing, but not at the same rate, and this resulted in busheling trading at an unusual $30 per gross ton premium compared with Fastmarkets’ pig iron, cfr Gulf of Mexico, price that was assessed at a midpoint of $655.35 per gross ton during the same period.

This unusual delta also occurred in the early part of the year when No 1 busheling in Chicago was trading at a $36.5 premium to pig iron in the first week of January, largely driven by slack demand from US mills amid thinning order books and an overhang of scrap.

7.      US copper scrap stable despite exchange fluctuations

Copper discounts have remained largely stable for the majority of 2022, despite fluctuations in Comex pricing. Copper scrap No1 copper, discount, buying price, delivered to brass mill US was unchanged from January 26 to October 4 at 9-11 cents per lb.

However, between January 26 and October 4, the most-active December delivery Comex copper reached a high of $4.9375 per lb on March 4, a low of $3.2115 per lb on July 14, and settled at $3.49 per lb October 4.

Sources throughout the year have said that volatility in Comex was leading to less reactionary discount rates, and that pricing was more impacted by changes in demand levels. While the majority of the year saw depressed domestic demand, fluctuating export demand, notably to China, has caused some movement of copper discount spreads and changing brass scrap prices.

“China and the United States are different in so many ways, but [both] react to increasing demand similarly,” one market source said.

If there is a decrease in Chinese demand, the source said, there is a “glut of copper worldwide,” and this effect will be felt more predominately in the US “as we rely on them quite a bit.”

According to the most recent US Commerce Department data, between January-August 2022, US exports of copper scrap totaled 701,162 tonnes, up 6.22% from the same 2021 period.

China’s imports increased 36.53% year-on-year, and its market share of US copper scrap exports to 31.22% in 2022, up from 24.29% in 2021.

8.      US stainless scrap intrinsics decouple

“It is hard to believe the 300 series stainless scrap markets have gone from so high to so low, and the London Metal Exchange (LME) cash nickel is still above $20,000 per tonne ($9.07 per lb),” said one scrap dealer.

Fastmarkets 304 stainless consumer price has fallen to 64-65 cents per pound in October, from 95-97 cents at the start of the year.

The intrinsics of pricing in austenitic grades of stainless are experiencing a major change as nickel remains strong, but dealers are complaining of lower prices from processors.

At the same time, consumers continue to increase their discount on nickel, causing lower prices from the consumer to processors.

It has been a challenge for scrap dealers and scrap processors to try to buy material with financial spreads to make a profit in this current world of unknowns.

LME volatility, ferrous scrap continuing its weakness and the annual ferrochrome benchmark taking a large drop for the fourth quarter of 2022 all complicate the situation.

This means the intrinsic values of stainless indicate a stronger market especially based on nickel prices, but with the large discounts applied by the consumers, the values or spreads for profitably disappear.

Until demand for raw materials returns, the market will continue to be soft and many only project the return to a more normal market by the second quarter of 2023.

Curious about what’s next for steel scrap prices? Join leading scrap industry experts and make new connections across the supply chain in Dallas at Scrap & Steel North America on January 17 – 19.

The post Around the world in eight scrap spreads appeared first on Fastmarkets.

At the same time, US exports of UBCs to Mexico declined by 17.55% to 5,593 tons in September, down from 6,784 tons in August. For the first nine months of 2022, UBC imports from Mexico fell by 17.97% to 46,354 tons, down from 56,512 tons in the same period in 2021. But US exports of UBCs to Mexico rose substantially year on year, soaring to 50,135 tons in January-September 2022 from 8,786 in the first nine months of 2021.

In the first nine months of 2022, UBC imports rose 1.63% to 171,338 tons from 168,592 tons in the same year-earlier period.

Fastmarkets’ assessment of the used beverage cans, domestic aluminium producer buying price, fob shipping point US declined in September, beginning the month at 74-78 cents per lb and ending at 68-72 cents per lb. The price was last assessed at 70-74 cents per lb on November 3.

US industrial aluminium imports totaled 13,569 tons in September, down 2.86% from 13,968 tons in August. Imports from Canada rose 4.01% to 10,150 tons from 9,759 in August. However, deliveries from Mexico fell by 20.74% to 3,202 tons from 4,040 tons in August.

Despite the month-on-month decreases in September, industrial aluminium imports continued to register year-on-year gains. In January-September 2022, imports of industrial aluminium increased by 18.25% to 128,131 tons, up from 108,356 tons in the same period of 2021.

US imports of other aluminium scrap decreased by 4.11% in September to 23,295 tons, down from 24,294 tons in August. Imports from Canada increased 1.10% on the month to 14,047 tons, but imports from Mexico declined 8.93% to 8,071 tons in September.

In January-September 2022, other aluminium scrap imports fell by 22.43% year on year to 223,371 tons from 287,968 tons.

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One buyer said that market participants who offered specific reasons behind current market dynamics were “shooting from the hip.”

At the Copper Roundtable on September 15, John Gross, publisher of The Copper Journal, spoke about current supply/demand imbalances, saying, “Logically one would say, if we’ve got the market in a deficit position and we’ve got inventories almost nonexistent, the price should be a heck of a lot higher than it is. So why isn’t it? That’s an open-ended question and I don’t have an answer.”

Discussions also centered around metal needs for the clean transition to a low-carbon economy and its emissions targets, grid necessities for electrification efforts, and logistics constraints.

New energy markets

Gross also spoke of the global copper deficit. “Inventories have been depleted,” he said. “The shelves are empty, completely.”

“If we look at the difficulties facing the copper supply side of the equation, it is incomprehensible what has been happening,” he continued. Companies have invested, “to explore, develop, plan, and begin building mining operations. And they’ve been stopped in their practice because of legal problems, cultural problems, environmental problems.”

Gross said that the necessity for copper cannot be underestimated.

“When we step back away from the whole thing, the United States cannot have it both ways. We cannot have, we will not have, a green energy transition unless we have copper…we cannot depend on imports of copper to make this green energy conversion come true. It isn’t going to happen. Something’s got to give.”

At the Future of EV/Battery Recycling panel, Guillermo Espiga, vice president and head of Business Development at Nth Cycle, noted that following the passage of the Inflation Reduction Act, there have been cancellations of overseas battery projects, with companies planning to bring the projects to the United States instead “because they want to take advantage of…credits” now available as a part of the legislation.

Panelists also noted growing opportunities for the US market, saying China currently dominates processing capabilities and rare metals mining.

“The [market] opportunity is growing so fast in the US,” Bob Mullaney, chief executive officer of IT Asset Partners, said during the electric vehicle (EV) panel, adding that “volumes are going to go up 300-400% over the next five years.”

“We have to put technologies in place to compete…from a world-wide standpoint,” said Mullaney. “Power in the world is needed everywhere.”

Tim Strelitz, owner and president of California Metal-X, emphasized the importance of building capacity in the United States. “The problem with business coming back is whether or not we have the infrastructure to be able to handle all of it,” he said. But, he continued, “that’s a really good thing.”

Decarbonization efforts were also mentioned by panelists, as was the idea that scrap metal is inherently a lower carbon material.

But for EVs and their necessary battery materials, market participants expressed concern regarding their processing and regulation from the recycling side.

“You know the reality is, it is the wild, wild west. I mean, right now half the problem with this industry is people don’t know what to do with it when they get it,” said Mullaney, regarding battery materials.

Mullaney said that market participants “are just terrified,” of dealing with such material.

“There is a tremendous opportunity,” in the market right now, said Espiga, “and our government has realized that we have a problem.”

The need for safety regulations had been brought up during previous ISRI events, with market participants noting that the prevalence of new electronic devices, including electric scooters and other battery-operated toys, have caused “millions in damage” through lithium-ion battery fires.

“It’s a growing industry, and by the way whether we want it or not it’s coming. The reality is the government’s invested too much money into it.” Mullaney said. “We’re got to sit down and get some regulations that make sense from a safety standpoint.”

Regarding the capability for the US to handle switching to electric cars, Gross said “I don’t think there is a city in this country that has the infrastructure in place, or even in plan, to begin accommodating electric vehicles.”

Chris Greenfield, vice president of The Federal Metal Company and moderator of the Copper Roundtable, agreed and said “the entire grid needs to be built.”

Market sources also noted that while pricing has been in decline, particularly for aluminium scrap, engaging in energy transition efforts and building out fleets of EVs as promised by car manufacturers will require a certain amount of material.

Increased export demand for certain grades, such as old sheet and non-ferrous auto shred (twitch), was seen by market participants as helping support some prices, while lagging domestic demand was continuing to put downward pressure on others.

At the Aluminium Roundtable, Josephita Harry, Pan American Zinc vice president of sales, non-ferrous metals and electronics scrap, spoke of growing demand in export markets.

“There has been a demand for twitch in export throughout the year…. Demand’s always been there, it’s just prices weren’t as competitive, so more material stayed in the United States,” Harry said.

But, she continued, “there’s also a lot of smelters in different parts of Asia that weren’t buying for several months because of the volatility of the market…. So all these people have not much material left to process and run their plants, and they realize they need more material.”

“While they could buy cast and they could buy zorba…they’re also buying twitch,” she said. “[It’s easier] to process it quickly. So, they’ve come back, the demand which was always there now seems to be stronger. One, because the domestic seems to have softened a bit, and two, they realize they still need to fulfill their orders and they need more material.”

Geopolitical concerns and transportation

Sources also noted the geopolitical implications of having resources and capacity concentrated abroad, especially in China.

Gross noted the ongoing war between Russia and Ukraine and said that a conflict between Taiwan and China was possible, with underlying sentiments felt by China toward Taiwan like those felt by Russia toward Ukraine.

Such a conflict could present serious issues for the US, Gross said, because “we [the US] have a major imbalance on a global level that what happens in China, and China’s economy, will have ramifications around the world.”

“What may happen between China and Taiwan, is going to implicate the United States,” Gross added.

Strelitz emphasized the need for the US to build domestic capacity but said that “China may have reached its apex,” and that “the future is happening in North America.”

“The dislocation and the disengagement of China and the United States, from my point of view, is a very healthy movement, if we don’t end up in a place where we don’t want,” Strelitz said.

The conflict in Russia and its implications on energy usage, particularly in Europe, was also discussed.

Harry spoke of the energy needed to achieve lower carbon emissions and allow for green innovation, particularly in regards to the continuing energy crisis in Europe.

“How could we go into an energy crisis?” Harry said, “There is an energy crisis for low-carbon means of energy. If we decide to burn coal all over the world and use it for energy, we would still have plenty.”

“We have to be aware,” Harry continued, that a stance has been taken to “make aluminium in a cleaner way, relying on resources that have less emissions. And hence, we are in a crisis.”

Panelists expressed concerns that Europe will go “from bad to worse,” and that curtailments of primary capacity will continue. Increasing usage of scrap may be the next step for Europe, but the US should not become “fixated” on Europe, given growing markets across East and Southeast Asia.

Sources agreed that port congestion was easing, with panelists noting container prices are coming down. Gross said that for copper exports “a lot has to do with less imports to China.”

“We do have an ongoing issue with the containers and supply chain and logistics,” Harry said, and that for the past several months “container rates were going up, not in hundreds, but in some…as high as a few thousand. But, [freight rates] are finally beginning to stabilize, which makes the export FAS rates a little bit more stable.”

This has been helped by more container availability, and slightly improved demand year on year, according to Harry.

While the demand side of the equation, particularly for aluminium, has gone through a “shock” the past several months, panelists at the Aluminium Roundtable said that the building of three new mills in the United States will affect trade flows of scrap.

Sources specifically noted increased opportunities for twitch, zorba, and used beverage cans in the domestic market.

Other market sources, however, reported continuing issues securing container availability for products such as lead scrap batteries. Sources in recent weeks have noted continuing price decreases with a “glut” of US supply, and not enough domestic capacity to process it all.

Financing and interest rates

Panelists at both the Copper and Aluminium Roundtables noted that when interest rates have increased, the value of the dollar has gone up. And when that value has increased, commodity prices come under pressure.

Tim Strelitz said that these moves from the Fed stemmed from inflationary concerns and fear of a recession. “I think the Fed is doing what they’re doing intentionally…I think part of their ambition is to drive prices down by increasing the strength of the dollar…So, part of this is disinflationary and the great fear is maybe a recession or something a lot worse.”

Panelists also noted that difficulty in financing metal in the US, when combined with market participants’ desire to hold on to material given market volatility, may be a cause of financial concern for companies.

But, Strelitz said on a more optimistic note, “The world’s a mess right now, but mankind always seems to get through these moments.”

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