With sluggish scrap demand from both the domestic and export scrap market, US scrap prices came down by as much as $20/lt ($19.68/mt) in October and early speculation points to another downtrend in November.
Overall demand in the US domestic steel market is slow, and thus domestic mills are hesitant to purchase significant scrap tonnages, only buying what meets their immediate needs and trying to keep scrap inventories low to avoid any sudden changes in the market.
Not only has domestic scrap demand declined, but scrap flow into yards has dropped as well. With the softening domestic scrap prices, scrap suppliers are continuing to hold up materials to sell in upcoming months when domestic mills need to secure their scrap inventories for winter--ensuring that prices will increase.
In addition, the falling euro against the US dollar, in previous weeks, and low scrap demand from foreign countries has led to a quiet US export scrap market in the past couple weeks--there have been hardly any scrap purchasing activities from US to Turkey and the Far East. Although the euro has recently rebounded against the US dollar in the past week, market sources do not see this as a lasting trend for now and expect a downward pricing trend on US export scrap prices.
Given the above, it is not expected that there will be any significant improvement in the US domestic scrap market next month, and domestic scrap prices may drop slightly in November.
In early October, US scrap prices went sideways to down by as much as $20/lt ($19.68/mt) when compared to early September prices, depending on grade and region. East Coast busheling scrap prices decreased by as much as $20/lt ($19.68/mt) to the level of $495 - 505/lt ($487.18 - 497.02/mt), while both shredded scrap and HMS I prices went down by $10/lt ($9.84/mt) to $440 - 450/lt ($433.05 - 442.89/mt) and $410 - 420/lt ($403.52 - 413.37/mt) respectively.
US Midwest busheling scrap prices dropped by approximately $15/lt ($14.76/mt) to the range of $495-505/lt ($487.18 - 497.02/mt), shredded scrap prices stayed neutral at $440-450/lt ($433.05 - 442.89/mt) and HMS I prices came down by $10/lt ($9.84/mt) to $405-415/lt ($398.60 - 408.45/mt).
Similar to the US scrap market, the pig iron market is also weakening with low demand and decreasing prices. The last pig iron transaction heard in the market was approximately $495/mt CFR Nola, representing a decrease of $20/mt from two weeks ago.
US domestic East Coast |
Long Ton (lt) |
Metric Ton (mt) |
Change from early September prices |
Busheling Scrap |
$495 to $505 |
$487 to $497 |
↓ $20 /long ton |
Shredded Scrap |
$440 to $450 |
$433 to $443 |
↓ $10 /long ton |
HMS I |
$410 to $420 |
$403 to $413 |
↓ $10 /long ton |
US domestic Midwest |
Long Ton (lt) |
Metric Ton (mt) |
Change from early September prices |
Busheling Scrap |
$495 to $505 |
$487 to $497 |
↓ $15 /long ton |
Shredded Scrap |
$440 to $450 |
$433 to $443 |
neutral |
HMS I |
$405 to $415 |
$398 to $408 |
↓ $10 /long ton |