Players within the US domestic scrap market say they’re fresh out of optimism, as rumors of a down $30-$50/lt have already started to permeate the market. Sources close to SteelOrbis have confirmed hearing that at least one major mill-affiliated scrap producer is talking about taking the market down between $40-$50/lt for February buys.
“With iron ore prices being so cheap, the EAF guys are fighting to get prices down so they can better compete with the blast furnaces,” according to one East Coast dealer source. It’s also been rumored that some scrap producers are booking import cargos out of Europe, which they’ve been able to get a good deal on due to the strength of the dollar.
Sources in Chicago and the Ohio Valley say that while they are hearing the same thing, they see the market settling down at $30-$40/lt, instead, with one SteelOrbis source describing the situation as being a “disaster” if it does really happen. “I think dealers will potentially hold if it goes down more than $30,” he said, “but you really never know.”
What is certain, however, is that January prices in Philadelphia, which were at $315-$320/lt for HMS I/II, $340/lt for shredded and $330/lt for P&S scrap, Chicago prices, which were at $330/lt for HMS I/II, $365/lt for busheling and $335/lt for shredded scrap, and that Ohio Valley / Pittsburgh-Cleveland area prices, which were at $325-$330/lt for HMS I/II and $370-$375/lt for busheling, have a downtrending forecast for February buys.