According to sources close to SteelOrbis, the latest ex-US scrap bulk deal in Turkey that reached $353/mt CFR on HMS I/II 80:20, $358/mt CFR on shredded, and $363/mt CFR on bonus scrap along with the expectations of stronger domestic demand are pointing to an upward trend in September. As one Ohio source stated, “I cannot see any scenario at this point that would prevent domestic scrap prices from rising in September.”
On the export front, US traders are expecting further support from Turkey with additional ex-US scrap purchases through August as alternative scrap sources are trending closely with the US prices, which historically trades at a premium, such as the latest shredded scrap price from the EU at $353.50/mt CFR and from Australia at $359/mt CFR. Additionally, various destinations such as Pakistan and India are expected to increase scrap purchases for fourth quarter shipments.
Sources are also pointing to dynamics in the domestic market that will support September scrap prices. Domestically, as scrap volume buys by some mills were slightly lower in August than expected, sources anticipate improved volume purchases in September. Also, September is expected to benefit from stronger seasonal factors.
In regards competition from imports, tags for imported steel into the US are up on higher raw material prices and the surge in global steel prices, and they are expected to continue strong on anticipated capacity cuts in China. Similarly, global price increases across steel products are likely to continue to benefit from the reduction in Chinese steel export volumes.
For now, scrap dealers are expressing a consensus of an increase of $20/mt on heavy melting steel and shredded scrap grades with higher price gains possible depending on market movements in the next several weeks. Prime grade scrap such as busheling, on the other hand, is for the moment expected to have limited upward mobility as it has reached historical three-year highs, and it is expected to be under some pressure from pig iron and prime grade scrap imports.
Compared to July, settled scrap prices in August traded up in the East coast, Ohio and Midwest regions.