Mid-June US scrap trend could spill over into July

Monday, 24 June 2013 00:41:20 (GMT+3)   |   San Diego
       

US domestic scrap prices were stronger than anticipated in June, and that trend is now poised to continue next month. It's too early to make definitive predictions about July scrap prices--the June market bucked the anticipated trend and went sideways to only slightly down--but a few are already anticipating a sizeable increase in prices next month. Scrap inventories at mills are low, according to scrap dealer sources, and with mill capacity utilization rates unwaveringly steady at 77-80 percent, many mills will need to stock up come July. Further, scrap dealers are feeling "more confident this time around," and are expected to push for an increase of as much as $20-$30/lt during July buys.

Whether that push will be successful won't be determined for at least another week and half, when negotiations for July pricing begin, but the market is already showing signs of improvement. In early June, while dealers were unable to push prices higher, they were able to stave off further declines in a number of regions. Shredded and HMS I/II scrap prices went slightly down ($5-$10/lt) in the Midwest and East Coast, but busheling prices settled sideways and even slightly up in most cities. Additionally the US export scrap market has been extremely quiet the last couple of months, with export prices to Taiwan and Turkey dropping significantly. But in the last week, export prices from the US East Coast to Turkey have firmed by about $10-$15/mt, although actual cargos sold remain light.

 

 


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