As March comes to a close, earlier predictions for a US domestic scrap price drop in the beginning of April is becoming increasingly likely. About two weeks ago, many anticipated that scrap prices would settle sideways to slightly down in April. But in the past week or so, those predictions have become more pessimistic. Dealer sources tell SteelOrbis that mills might try and push scrap prices as much as $20/lt in the Midwest--erasing about half of the March gain. Domestic scrap prices rose most significantly in the Chicago/Detroit regions in March, but the unexpectedly sharp price surge was largely driven by winter storms hitting the region shortly before prices settled. Since then, the weather has improved, but scrap flow still is not strong in the Midwest.
On the East Coast, the market is likely to be influenced by the lack of import activity and Northeast export yards dropping prices in the last couple weeks. Turkish mills have been on the sidelines during the latter half of March, only making sporadic scrap purchases from the US as they wait for US domestic prices to drop in April (and possibly export offer prices as a result) before stocking up on scrap. However, if US domestic mills attempt to bring scrap prices down more than $10-$15/lt, sources anticipate that dealers could push back, and even refuse to sell scrap at prices significantly below prices in March. For now, until mill buyers enter the market to negotiate April scrap buying prices over the next week, the extent of the price drop will remain solely speculation.