As scrap demand picks up in both the domestic and export market, US scrap prices have gone up $35 to $45/long ton ($34.45 to $44.29/mt) in December, depending on grade and region.
On the East Coast, busheling scrap prices have increased approximately $35/lt ($34.45/mt), shredded scrap prices have climbed approximately $40/lt ($39.37/mt), and HMS I prices have jumped approximately $45/lt ($44.29/mt) from early November prices. However, in some Midwest areas, busheling scrap prices registered an increase of as much as $50/lt ($49.21/mt). Currently, East Coast busheling scrap prices are in the level of $435 to $445/lt ($428.13 to $437.97/mt), shredded scrap prices are at $395 to $405/lt ($388.76 to $398.60/mt), and HMS I prices are between $380 to $390/lt ($374.00 to $383.84/mt).
With low levels of scrap tonnage in stock and the approaching winter, domestic mills are now finding it necessary to replenish their scrap inventories, which is building up strong scrap demand in the market. On the other hand, scrap supply continues to be tight. The coming winter months will make scrap availability even worse as scrap collection and transportation will be more difficult. Traditionally, scrap flow is usually slow through February or March. Therefore, with the soaring scrap demand and limited scrap availability, the US scrap market is strong and domestic scrap prices have gone up significantly.
The firm scrap export market also supported the domestic scrap price increase. Turkish producers are buying scrap actively due to the strength of their local rebar and billet export markets. Current export prices to Turkey are at $410 to $420/mt CFR ex-US, registering an increase of approximately $20/mt from two weeks ago.
Looking forward, the US scrap market is expected to remain strong. More scrap buying activities are anticipated in the market in January when prices are expected to rise significantly. Consequently, some US scrap suppliers are holding their materials at the moment and will offer at higher prices later in January.
In the pig iron market, prices have also increased by approximately $20/mt from two weeks ago and have reached the new level of $480/mt CFR Nola. Tight pig iron supply and increasing demand from the US as well as other parts of the world, particularly Europe, contributed to the price increase. It is expected that pig iron prices will continue to go up by another $20 to $30/mt in January, depending on demand.