Two weeks ago, the February outlook within the US domestic scrap market was bleak; today, sources throughout the US say they’re holding on tight in anticipation of March.
Prices for busheling scrap in the Chicago region trended down approximately $105/lt this month, settling to $260/lt CFR. In the Ohio Valley, Pittsburgh/Cleveland area, prices for HMS I/II scrap settled down approximately $85/lt to $240-$255/lt, while prices for P&S scrap have settled at $270-$275/lt.
Looking to the East Coast / Philadelphia region, prices for shredded scrap dropped by $100/lt month-on-month, bringing the most current range to $230-$240/lt; bundles and busheling are now transacting in the approximate range of $260-$265/lt.
Midwest and Ohio Valley sources question whether markets in that region have reached bottom, with many preparing for another “down $20-$30/lt” for March. And while some think prices could exhibit a small bounce back into April and May, everyone thinks the market will still be off between $60-$80/lt from levels seen in January, with a strong possibility that this trend could hold through the close of 2015.
In the Philadelphia region, sources close to SteelOrbis believe scrap prices have reached their bottom; their greater concern, they say, is less related to price and more related to the fact that mills just aren’t buying. Finished steel purchasing agents throughout the US report having healthy inventory levels and that since prices are falling and they don’t immediately need steel, they are holding off until they hit a “must-buy” situation.
“Mills still seem to be functioning off the scrap they bought in December and January,” according to one East-Coast based source. “But at some point, everyone is going to need to step back into the market and it will be interesting to see how that shakes out if it all hits at the same time.”