There have been a few telling signs indicating the direction of the US domestic scrap market in September. In early August, the weakness in the shredded scrap market was abundantly clear. Even though mill demand for shredded scrap was decent, strong flows meant there was still too much availability throughout the Midwest and the East Coast and prices fell anywhere from $10-$20/lt in the beginning of the month. The other scrap grades, busheling and HMS I, fared better--busheling prices were unchanged in August and HMS I scrap prices generally only slipped about $5-$10/lt. There was some anticipation that shredded scrap availability could lessen following the August buys if scrap flow slowed as a result of the price drop.
However, the softness in Midwest shredded scrap prices has spilled into August, and at least one mill was able to purchase material mid-month at prices down slightly--$2-$4/lt--from early August levels. In the meantime, export activity off the US East Coast has been lively, with plenty of cargos sold to Turkey in the last couple weeks, at prices around $380-$390/mt CFR, depending on grade. The steady stream of exports is anticipated to help tighten up the shredded and HMS I scrap market in September in the Northeast. Shredded scrap prices could show some increased strength in the East Coast, and maybe even in the South as well, while dealers may face headwinds trying to raise prices (or keep them stable) in the Midwest. Demand for busheling may slow somewhat in September--a few mills have scheduled outages planned, therefore lessening their raw material needs. Overall, early predictions point to little change in prices next month, at least for now.