US shredder feed prices buoyed by nonferrous, supply
US shredder feed prices jumped over the last week, fueled by increased demand, tighter scrap flows and tailwinds from gains in secondary nonferrous scrap grades in domestic and seaborne markets.
Average US export yard buying prices for shredder feed in Albany, Boston, New York and Philadelphia hit a 16-month high this week at $184/gt delivered export yard.
A combination of stronger domestic and export prices for shredded scrap has driven strength in shredder feed scrap prices.
US domestic shredded scrap increased by $30-$40/gt in the September ferrous scrap trade, while sustained Turkish demand fueled gradual gains in bulk shredded scrap export prices since mid-August.
Over the last two weeks, shredders have been able to tap into higher streams of revenue from various nonferrous downstream items, including shredded aluminum products like zorba, as well as lower-grade copper units like electric motors and many other scrap grades.
US consumer zorba 95/2 prices hit a more than two-year high at 44-47¢/lb delivered last week, the highest level since Argus began assessing it in August 2018, while Indian import prices for 95/2 hit a 16-month high at 48-50¢/lb cif.
The gains in zorba prices come on the back of sustained demand at home and abroad as well as lower levels of generation because of slower flows.
At the same time, shredders and scrap processors have also seen prices of other scrap grades climb like electric motors, which have been hovering at 16-month high since late-August.
Faced with steady underlying demand fundamental on the ferrous scrap side of the market, the price gains in nonferrous scrap items have provided shredders with a strong tailwind.
Shredder feed prices assessed by Argus at the four major US east coast exporting regions as well as light iron retail scale prices across six US regions have all witnessed accelerated rates of price growth over the last week.
Light iron scale prices rose $10-$30/gt last week with prices across all six regions ranging between $113-$135/gt.
Despite expectations of continued strength in the US domestic ferrous scrap market next month, market participants are maintaining a cautious outlook on the seaborne ferrous and nonferrous markets amid a pause in buying activity from Turkey, as well concerns that key international zorba markets may be nearing a pricing peak.
By Brad MacAulay
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