The predicted trend for US domestic scrap prices in early September has grown more pessimistic over the last couple weeks. Mid-August scrap transactions were extremely minimal, but at least one Midwest mill purchased shredded scrap at prices that reflected a $2-4/lt decrease from prices paid in early August. Overall, September is poised to be a soft sideways market, although prices are unlikely to settle until after the Labor Day holiday. Scrap flow did not falter throughout August, and supply/demand appears to be in balance on the East Coast, while scrap availability in the Midwest could once again surpass demand, but only moderately, in September.
Regions where scrap prices were higher in August, such as Ohio/Pittsburgh, could see a larger price correction on shredded scrap as opposed to the East Coast, whether scrap dealers don't anticipate much change in prices across all grades. Demand from mills is not expected to wane much in September, but a few scattered outages, coupled by continued shredded scrap overhang in the Midwest, could result in an approximately $10/lt drop in shredded scrap prices in cities such as Chicago and Detroit, with HMS I and busheling prices holding at sideways to just slightly down. Once again, busheling will likely be the strongest of the scrap grades in September, holding steady in August, and likely to continue that trend this month as well.