After registering a $40 /long ton (lt) price decrease in the beginning of February, US
scrap prices continued to trend downward throughout the month. In the first week of March, US
scrap prices dropped further, decreasing by approximately $25 to $30 /lt due to the weak finished product market and the slumping economy.
Following the March price decrease, US domestic East Coast busheling
scrap prices currently range from $200 to $210 /lt. Shredded
scrap is sold for $190 to $200 /lt, while HMS I prices are at the level of $165 to $175 /lt.
Looking forward, US
scrap demand will continue to be slow in the near-term. With the prolonged softening of finished product prices and the gloomy economy, domestic mills are still not in any mood to purchase much
scrap. Today, the few
scrap purchases being made from domestic mills are only for small amounts, purchased to reduce the cost of inventory and shipping costs. Furthermore, some mills are also shutting down
production entirely to wait out the market in this uncertain economy.
On the supply side, there is less
scrap being generated from the
automotive, appliance and industrial
manufacturing sectors. Therefore,
scrap supply and demand are in better equilibrium, and
scrap prices may close to hitting the bottom. However,
scrap prices are not expecting to recover in the near-term, as the dismal economy will likely continue to impact the steel market negatively.
Meanwhile, US export prices are also trending downward.
Turkey, the leading US
scrap importer, has been quiet since the beginning of February. Instead, the Turkish producers are buying Russian and Ukrainian billets actively.