As of the week ended March 3, the US domestic scrap market is in the midst of trading for the monthly buy-cycle. According to a source, “The numbers for March are looking up and robust as a result of high demand and tight supply.”
Sources are reporting Midwest prices on prime up by $51-61/mt. A source noted, “We expected up, but these numbers are higher than expected, especially since the Nucor DRI plant has announced it is resuming operations on the week ending March 10. No one wants to take risks with delays plus shipments may not be up to par until April.”
After Turkish scrap import prices and global markets gained momentum following the end of the February buy-cycle, the US domestic scrap market had been predominantly predicted to increase by $20-40/mt depending on region and grade, but few were predicting an increase of $55-60/mt on prime in the Midwest.
As a result of the strong demand for prime scrap, recent preliminary AD margins announced against Turkish rebar (ranging from 5.29-7.07 percent), tight overall scrap inventories at US dealers, high capacity utilization at US mills, and increasing pig iron offers from both the CIS and Brazil, sources close to SteelOrbis are reporting HMS I, shredded and P&S should be up $25-45/mt, depending on region and grade, once prices settle next week.
A source stated, “Many of our agreements are on a price-to-be-determined basis as not everyone has entered the market yet. Inventories are adequate but demand is also strong. Additionally, prices to acquire scrap are up and may continue moving up to continue drawing the necessary supplies.”