The US scrap market is experiencing a price correction and prices came down significantly in the beginning of May, but prices have climbed back up slightly in the past week.
US scrap prices had decreased as much as $50/long ton ($49.21/mt) in the beginning of May, however, dealers rejected the significant price decrease. As a result, domestic industrial grade scrap prices for May have adjusted to a $5 to $10/lt ($4.92 to $9.84/mt) decrease, while domestic obsolete grade scrap prices now reflect an approximate $35 to $40/lt ($29.53 to $39.37/mt) decrease from April. Currently on the East Coast, busheling prices are in the level of $455 to $465/lt ($447.81 to $457.66/mt), shredded scrap prices are between $350 and $360/lt ($344.47 to $354.31/mt), and HMS I prices range at $335 to $345/lt ($329.71 to $339.55/mt).
Most market insiders think the price decrease in May is a price correction process, as domestic scrap prices went up too high in the past couple months. They mentioned that scrap demand is still there in the market. Although the domestic mills are not in a big hurry to buy scrap at the present time, it is expected that they will still need to buy scrap going forward in order to meet the gradual increasing manufacturing and automotive production. Therefore, some optimistic market sources anticipate the US scrap prices may bounce back up next month.
On the other hand, domestic scrap availability is improving due to the warmer weather that allows better scrap flow and easier scrap collection. Nevertheless, as many dealers had sold significant scrap tonnages in April already, there is not a lot of scrap supply left in the yards, though the scrap inflow is in good condition. Due to the market uncertainty, dealers and mills manage the inventory very carefully and conservatively to avoid any market fluctuation and to avoid overstocking.
The latest USITC data show that the total amount of ferrous scrap exports from the US in March was 1,080,000 mt, reflecting a decrease of 367,000 mt month-over-month and a decrease of 644,000 mt year-over-year.
The main recipients of shredded scrap from the US in March were: China, at 126,000 mt; Turkey, at 65,000 mt; South Korea, at 52,000 mt; Thailand, at 48,000 mt; Malaysia, at 47,000 mt; Taiwan, at 33,000 mt; and Peru, at 31,000 mt. Countries that imported smaller amounts of shredded scrap from US during the month include India and Canada.
For HMS I grade scrap, the top recipients of US exports in March were: South Korea, at 167,000 mt; Turkey, at 107,000 mt; Taiwan, at 50,000 mt; Malaysia, at 31,000 mt; and China, at 26,000 mt. India, Pakistan, Indonesia and Canada imported some tonnage of HMS I grade scrap from the US during the month as well.