How will US domestic scrap trend during the September buy-cycle?

The relative abundance of busheling and bundles is expected to force September prices for prime-grade scrap down by $10-20/mt depending on region.  Additionally, the automotive market, a heavy user of prime-grade scrap, is reporting a dip in vehicle sales, which could reduce mill production of certain automotive components.

In contrast, September prices for HMS I and P&S scrap are expected to remain stable throughout most regions due to tight supplies.  HMS I is difficult to locate in certain parts of the Midwest, especially Ohio, while the South faces a scarcity of plate and structural scrap.  Prices on the East coast for these grades, however, are forecast to trend slightly down.  East coast-based scrap yards continue to report that local mills’ scrap demand is still trending weak due to inventory controls and planned maintenance. Additionally, still-weak export scrap demand from Turkish steelmakers places downward pressure on East coast pricing of both heavy melting steel and shredded scrap.

The September forecasts for shredded scrap range from sideways to down $5-10/mt depending on regional supply. Metropolitan shredding scrap yards tend to possess ample supplies, while rural regions are in need of feedstock. 

Import scrap for the domestic market appears limited.  However, sources close to SteelOrbis have suggested that European scrap exporters may consider offering fragmented scrap to US mills due to their ability to gain higher price points from US buyers than they can currently obtain from Turkish steelmakers.  The threat of this supply source for September delivery may further soften the price for shredded. 

Mills are expected to begin scrap purchases on September 6. August settled pricing in table below.