As recently as two weeks ago, many within the US domestic scrap market believed that prices would level off, or decline slightly during the June buy cycle; today, in the absence of export scrap activity, the new general sense is that prices are set for a downtrend.
The big question, however, is "down by how much?"
"Scrap flow into yards is almost spot on from April but there's no business to speak of out of Turkey," one source said. "US demand should be as good if not better in June than May but not enough to offset the loss of export business."
Other sources agree.
"I'm hearing various things and some people seem to be rather bearish on HMS and shredded, like some guys thinking the market is going down $30-$50 a ton but some are likely more bearish than reality. That being said, some are probably unreasonably optimistic. We feel prices are going to come down and that the East coast will likely be hit the hardest and will fall in the down $30/gt range."
A third source said they believe that the lack of export cargo bookings to Turkey will push scrap tons inland, which could drive prices down in those regions, as well. "We're calling the market at down $10-$30/gt depending on the region and the grade," he said.
This month, US East coast HMS scrap settled at $264/mt ($260/gt), shredded scrap settled at $295-$300/mt ($290-$295/gt) and busheling scrap settled at $295/mt ($290/gt).