The first quarter total US scrap exports came in at 3,152,000 tonnes, up 11.0% year on year (y/y). Once again Turkey was the largest importer, bringing in 542,700 tonnes in the first quarter, an 11.8% decrease y/y.
Mexico was the next largest importer with 442,738 tonnes in Q1, an 83% jump y/y. Taiwan ranked third, importing 399,766 tonnes, a 57.7% increase compared to Q1-2016. China was the next biggest with 314,286 tonnes of US imports, a 162.3% y/y increase. In fifth position was Canada at 216,814 tons for a 30% increase y/y. Rounding out the top six was South Korea with 154,606 tonnes, 26.9% lower than Q1-2016. The top six total was 2,070,900, accounting for two thirds of total US scrap exports in Q1-2017.
Figure 1 presents scrap imports from the top six exporting countries for the period between 2013 to March 2017. The data is shown as a stacked bar chart for the countries and a black line sums the quarterly totals for all players. US scrap exports have trended down since 2010. Scrap exports bottomed-out in Q1-2016 and have picked-up a little since then.
Figure 2 illustrates, that currency (the Broad Index), and US scrap exports are correlated, with a coefficient of 0.66. The Broad index shown on the right hand Y axis in reverse order. Scrap exports are presented on the left hand Y axis in millions of tonnes. Note that of late the two data sets are diverging. We are unsure of the reason for the separation, but reason that it is likely demand driven. The Turkish rebar market is on the rise and China is reportedly producing at an all-time high.
Currency exchange is not the only factor in the purchasing decision, albeit it is a significant one. Availability and quality of supply are also key determinates. The US has historically had both readily available of supply together with excellent quality.
Scrap cost is the single largest cost in the production of steel in the electric arc furnace. At Gerdau we monitor scrap costs and the factors that influence it very closely.