According to sources, there have been some cancellations heard today of scrap orders booked by mills during the May buy cycle, but yet not delivered as of May 31. This action traditionally precedes the expectations of a decline in scrap pricing by mill buyers during the upcoming buy cycle, and it is consistent with the expectations of several scrap sources close to SteelOrbis that the US domestic market will trend soft sideways this month.
A scrap dealer in the Ohio Valley stated, “We may see shredded scrap move down $10/mt compared to May settled numbers, but cuts such as heavy melting steel and prime grades such as busheling and bundles are on tight supply and should trend stable.” In the Midwest and Central regions, sources expressed concern of potential downward pressure on scrap grades such as shredded, heavy melting steel, and P&S due to a ‘scrap overhang in the market’ that could decrease prices on those grades up to $10-20/mt in some deals, yet prime grades are expected to continue trending sideways on tight supply.
Another source noted that the mills are quiet and may move slow with buying activity as the end of the week approaches, and the scrap market may not trade until early next week.