US East coast scrap saw a slight upward swing in export prices to Turkey this week but limited demand from domestic mills. Expectations coming into the October buying cycle were $10-20/mt down across all grades. HMS I, shredded, busheling and P&S scrap prices moved down approximately $20/mt this week with HMS I/II 80:20 scrap prices moving down only $10-15/mt due to recent Turkish demand.
As scrap buys have been limited from mills this week with mill buyers at times not answering sales fulfillment calls, scrap dealers close to SteelOrbis are not having the same “settled” experience of previous months. Several sources close to SteelOrbis believe that the market uncertainty, tight inventory control at mills, and end of year planning are influencing a delay in scrap purchases that may result in ongoing purchases throughout October instead of the usual beginning of month commitments.
In regards the adequacy of scrap inventories, a scrap dealer commented, “Flow of scrap is not great but not as low as expected given the decreased price to collectors. It is a good balance as this is the last month of full production at scrap yards as November and December only see about 2 weeks of production each.” Another large scrap dealer in the East coast stated, “Many of us, except those desperate for cash flow, are not interested in going lower as our scrap yard production is off (lower) 40 percent. It is a herd mentality and eventually mills will come back.”
The Midwest, Ohio Valley and Southern US regions are expected to settle next week down $10-20/mt on HMS I and shredded and $20-30/mt on busheling. At the moment, they are also encountering limited orders.
Settled scrap pricing for October:
| October 7, 2016 (delivered to customer) |
East Coast |
| HMS I/II 80:20 | $142-147/mt ($140-145/gt) |
| HMS I | $152-163/mt ($150-160/gt) |
| Shredded | $188-193/mt ($185-190/gt) |
| Busheling | $188-198/mt ($185-195/gt) |
| P&S | $168-173/mt ($165-170/gt) |