According to sources close to SteelOrbis, the high prices on US domestic scrap achieved during the March buy cycle drew a surplus of cuts and obsolete grades into the market that has seen recent spot prices on shredded, for example, decrease $5-15/mt this week, depending on region.
Assessing the buy-cycle in April, several sources have informed SteelOrbis that expectations are sideways on busheling due to the limited ability to increase industrial scrap supplies in the market. One source noted that busheling and bundles set the pace for the high March prices and are not expected to decline into April. On the other hand, the higher amounts of P&S, shredded and heavy melt are expected to lower the April buy-cycle prices of those grades. According to one source, the prices may have already factored in the $5-15/mt decline in scrap spot prices which will continue into early April, while another source said that the April settlement prices may fall further by $5-10/mt for an effective decline of $10-25/mt when prices are compared against prices in early March.
A recent ex-EU deal of $285/mt CFR for HMS I/II 80:20, $290/mt CFR for shredded and $295/mt CFR for prime grades is also factoring into the scrap outlook for April. During the March buy-cycle, both US exporters and coastal shredders received an estimated $15/mt more on shredded scrap for domestic deals than those to Turkey based on the $308/mt CFR price prevalent for ex-US shredded scrap at the time. With the decline in Turkish import prices of scrap, which will place pressure on potential ex-US deals in March, several East coast contacts believe that the strength of domestic prices compared to export will increase the flow of scrap from US exporters and coastal shredders into the inland market, thereby, putting additional pressure on prices during the April buy-cycle.