US domestic scrap prices registered a sizeable drop in February due to an oversupply of busheling and declines in US export scrap prices throughout January. While domestic scrap prices haven't fully settled yet, the overall market in the East Coast and Midwest is already down about $25-$35/lt from early January prices. Busheling prices fell about $30/lt to $480/lt ($472/mt) in the East Coast, and a more substantial $40/lt ($39/mt) in Midwest, due to over-hang of imported pig iron being substituted for scrap by some flats mills and excess availability stemming from a milder than expected winter and many dealers selling less scrap the last two months in anticipation that prices would increase. Scrap dealer sources tell SteelOrbis that while they've sold a lot of scrap in the first few days of February, there's still a considerable amount to still be sold--a few mills have not come back into the market yet--which may drive down prices a bit further as the month progresses.
Shredded and HMS I prices have also fallen this month, with shredded down about $25/lt to $450/lt ($443/mt) in the East Coast, and are down $25-$30/lt in the Midwest. HMS I prices have fallen $20/lt so far in February to $390-$400/lt ($384-$394/mt), depending on region. Ex-US East Coast scrap prices to Turkey fell about $20-$30/mt over the past month, translating into a similar drop in US domestic prices. But while export prices are still slowly softening, industry insiders have indicated that prices are likely close to hitting bottom, and could rebound later this month.
Despite declines across the board in February, early speculations are already pointing to prices recovering in March. Busheling supply is expected to lessen in March with less pig iron availability and export scrap prices may start to recover now that Turkish mills have resumed buying activity.