The recent July scrap buy-cycle encountered a mostly sideways pricing trend compared to June settled prices with limited increases of $5-10/mt on some grades and in limited regions. On the East coast, HMS I and shredded increased up to $10/mt while the remaining grades trended sideways. Mills purchased busheling up $10/mt in Detroit, Chicago and Ohio due to limited supply, but the remaining grades trades sideways. In the lower Midwest and Pennsylvania regions, scrap traded sideways across all grades.
Assessing the August outlook, opinions are presently diverging from a sideways to a slight increase in scrap prices under a continued assessment or positive Section 232 result but a slight slide in scrap prices under a negative Section 232 result. A move toward tariffs is expected to support increases in flat steel prices and service center demand, but if tariffs are not implemented, prices and production volumes of steel products are expected to trend down, along with scrap prices.
Presently, prime grades such as busheling and bundles are expected to continue strong next month, although some sources believe that supply will be better compared to July and mills could be hedging additional price increases with imported scrap, DRI and pig iron. On the East coast, shredded and heavy melting steel pricing is presently being supported by export demand and could trend up.
Inland, several sources close to SteelOrbis in the Midwest and Ohio Valley are concerned about limited supply of cut grades such as heavy melting steel and P&S. The tight supply could boost prices of cut grades up. Additionally, increases in freight rates are expected to support delivery prices. Inland shredded scrap prices may fall slightly on adequate feedstock into yards, but a potential increase in demand due to the wide price spread compared to busheling scrap may remove the possibility of the price erosion.