US domestic scrap prices surge in August

US domestic scrap prices throughout the US rose quickly at the beginning of August, but prices in the South and Midwest made the most notable gains. As the final days of July drew near, it became evident that US domestic scrap prices would bounce back strongly during August buys following declines totaling over $100/lt in the past two months. Many mills were not anticipating August prices to register the $30-$80/lt gains with some even anticipating a possible sideways price trend. As a result, mills' scrap buys in July were smaller for their production levels and many mills were left with little inventory by late July; meanwhile, such sharp price decreases in June and July slowed down scrap flows into yards. Another driving factor impacting prices in August was the return of a couple major scrap users to the market, which had been absent the past few months while they used imported scrap from the CIS as well as pig iron as a substitute.

Sources tell SteelOrbis that mill buyers approached scrap dealers in the Midwest offering to buy all grades at up about $50/lt but the dealers refused and prices were then pushed higher and higher. While the US domestic market has not officially settled and there are still a few mills that have not locked in their orders for this month, scrap sales in the Midwest in cities such as Chicago and Detroit have reflected an increase of about $70-$75/lt over July prices. Additionally, while many reports are indicating that prices in the South rose by a similar level, industry sources have noted that a few mills have had to pay increases of over $100/lt compared to July prices. Domestic prices in the Philadelphia region jumped about $30-$40/lt while sales in Pittsburgh and Cleveland took place at up $50-$60/lt from July. Looking to September, the trend is still pointing upward with early speculation pointing to another increase, but not nearly the surge seen this month.

As mentioned, scrap prices for August have not fully settled, but recent deals have pegged US domestic scrap prices in early August as: