According to sources, US domestic mills are presently quiet and are expected to begin trading by August 1 or 2. The latest ex-US scrap export deals to Turkey at $320-$324/mt CFR for HMS I/II 80:20, have given dealers additional optimism for pricing in the domestic August buy-cycle. The latest export deals, in contrast to the $290/mt CFR price for HMS I/II 80:20 in late June and the $296/mt CFR deal in early July, are up $28-30/mt. According to sources, domestic scrap markets are expected to trend upward buoyed by the stronger global raw material and flat steel prices. Additionally, domestic demand for scrap is expected to be stronger in August, as several mills are returning from planned summer shutdowns.
On the East coast, competition for scrap supplies for the export market is expected to increase prices in the domestic market by $15-30/mt depending on the grade. In the Ohio Valley and Pennsylvania regions, cut grades such as heavy melting steel and P&S are reportedly on extremely tight supply. A source noted that even shredded scrap may be in short supply on stronger domestic demand. A separate dealer stated, “Dealers are very optimistic and will review price potentials very carefully before pulling the trigger on selling.” Expectations in that region presently point to a solid increase of $15-20/mt across all grades.
In the lower Midwest and central regions, expectations a weeks ago were “firm-sideways,” but given the outlook on strong domestic demand and export influence, prices could increase $5-10/mt in August deals. While mills may rely on sufficient shredded scrap supplies to maintain prices, demand and market expectations may have dealers resisting the status quo pricing.