What is the outlook for US domestic scrap in the December buy cycle now?

Friday, 02 December 2016 10:28:53 (GMT+3)   |   San Diego
       

Market sources inform SteelOrbis that scrap prices may rise $25-30/mt across all grades during the December buying period.  Mills in the Midwest and the Southern US anticipate a $30-40/mt increase across all grades in December. Last week, domestic HMS I scrap prices in the East Coast of US were at $188-198/mt delivered to customer.
 
Multiple factors are currently driving expectations including recent demand and price increases for domestic finished goods, heightened demand from flat producers, and a tight supply of domestic scrap.  In addition, favorably priced imports are presently scarce, while global market prices for near substitutes such as billet and pig iron have risen to uncompetitive levels.
 
In November, US flat-rolled mills increased prices by nearly $100/mt.  Order lead times have increased for HRC to four to five weeks, while the lead times for cold-rolled and galvanized products have stretched to up to eight weeks.   Sources inform SteelOrbis that flat-rolled mills are likely to acquire as much material as possible, early in the buying cycle in order to avoid running out.  For some US mills, the search for favorably priced material began prior to Thanksgiving, and others have begun issuing ‘price-to-be-determined' purchase orders.
 
Another key factor driving positive expectations for the US scrap market in December is the relatively short supply of competitively priced material available on an import basis.  Pig iron, for example, has increased to $320-330/mt CFR New Orleans, which translates to roughly $360-375/mt delivery to mill.
 
Seasonal factors, including reduced intake due to inclement weather, are likely to limit the availability of material in December.  For instance, planned holiday shutdowns at auto stamping plants will contribute to a shortage of domestic industrial scrap into January.  Many scrap yards are reporting that supplies on the ground are extremely tight.  Some dealers plan to limit their offerings during the December buy, as based upon the expectation of higher prices and demand in January. 


Similar articles

Mexican domestic scrap prices

28 Mar | Scrap & Raw Materials

Carbon and stainless scrap prices in Taiwanese domestic market - week 13, 2024

28 Mar | Scrap & Raw Materials

Turkey’s deep sea scrap prices stabilize at $385-390/mt CFR

28 Mar | Scrap & Raw Materials

CISA: Coking coal purchase cost in China down 9.86% in Jan-Feb

28 Mar | Steel News

US scrap market still expecting sideways pricing in April

27 Mar | Scrap & Raw Materials

Ex-US deep sea scrap prices to Turkey increase, ex-EU prices relatively stable

27 Mar | Scrap & Raw Materials

Downtrend reverses in Pakistan’s import scrap segment

27 Mar | Scrap & Raw Materials

Average local Chinese scrap prices rise amid tight supply after previous decreases

27 Mar | Scrap & Raw Materials

Import scrap prices in India move up, but low bids prevent deals

27 Mar | Scrap & Raw Materials

Baltic countries and Czech Republic seek EU ban on ex-Russia scrap imports

27 Mar | Steel News