How will US domestic scrap trend in August after recent export activity?
On July 14, SteelOrbis reported August scrap price predictions from various scrap dealers, which diverged from a sideways to a slight increase under a positive Section 232 result but a slight slide in scrap prices under a negative Section 232 result.
With the recent “Made in America” rhetoric by President Donald Trump on domestic pipeline projects along with promises for near completion of the Section 232 investigation—despite some concerns for trade retaliation by other countries if protection measures implemented—sources note that “there is much optimism about business from domestic scrap producers and consumers.”
Additionally, the latest ex-US export scrap deal to Turkey for 10,000 mt of HMS I/II 90:10 at $311/mt CFR and 30,000 mt of shredded scrap at $314/mt CFR, along with strong export scrap prices in the Baltics and EU, has increased the barometer on the sentiment for August and expectations are now pointing to a potential increase in prices compared to July.
Several sources in the Ohio Valley and Pennsylvania regions mentioned the potential for an increase of $10-15/mt in HMS I, P&S, and shredded while prime scraps such as busheling and bundles may also gain $10-15/mt. In the Pennsylvania region, scrap traded sideways in July while they traded mostly sideways but with a slight increase on busheling in the Ohio region. Demand from exports and positive expectations for August are already seeing prices moving up on the East coast docks.
In the Midwest, despite a potential surplus of shredded in the region, sources are reporting expectations of a firm sideways trend given the recent announcements of price increases at flats mills, slightly tighter inventories at service centers, and the resurgence of buying activity at higher prices.
*This was published on SteelOrbis website on July 21, 2017.