After three consecutive months of rising prices, US domestic scrap prices in February declined largely due to decreased scrap export prices to Turkey; an ex-US deal for HMS I/II 80:20 fell $42/mt to $240/mt CFR in late January from its height of $282/mt in mid-January. Fortunately, the decline in scrap prices was dampened by robust domestic demand as US mills have slightly increased capacity utilization and are facing adequate finished product sales at increased prices compared to Q4 2016.
According to sources close to SteelOrbis, as mills anticipated the decline in prices in February many proceeded to cancel all undelivered orders at the end of January. As a result, mills are now finding themselves short of scrap and are already discussing orders for March with scrap dealers. Given the demand volume and tight scrap supply, one source stated, “Domestic mills will have to pay up for scrap in March as long as export numbers remain steady at $283/mt CFR Turkey per latest ex-US transaction. Additionally, any spot sales would already be higher than settled February prices.”
The positive sentiment into March is consistent among all sources, though, some believe that March prices will return on par to January prices while others believe the March increase could surpass January prices. Compared to February, the East Coast could see HMS I and shredded up $35-40/mt while the inland regions could see HMS I and shredded move up $25-35/mt.
In regards to busheling, which has increased in spot pricing since prices were settled this month, the new pricing in March could see it increase a further $10/mt from the present inland prices of $335-345/mt, according to sources.
Regional settled prices for February were reported by SteelOrbis on Feb 7 for the East Coast and Pennsylvania regions and Feb 8 for the Ohio Valley and Midwest regions.