Will US scrap prices trend up in September?

Tuesday, 15 August 2023 23:28:44 (GMT+3)   |   San Diego
       

Abysmal scrap inflows and higher ex-US scrap cargo sales prices to Turkey have numerous scrap market sources saying they think prices have the potential to trend up in September.

As of today, August 15, many suspect that cut grades could firm by $20/gt from August settled levels. Prime scrap, however, remains a wildcard.

For example, earlier today, news outlets reported that contract negotiations between the United Auto Workers (UAW) labor union and US automakers are ongoing. A spokesperson from UAW has also said that because progress is not being made, that UAW members are ready to vote on a strike authorization.

That vote could come as soon as next week.

“If the UAW strike happens, I could absolutely see primes going up,” a source said. “If autos aren’t being made, primes are going to be tight.”

Other sources have said that when it comes to other grades, inflows have been “absolutely terrible.”

“Flows have been disastrous. It’s been very very slow,” an East-coast based source added. “There’s really no scrap to sell unless [we pay peddlers more] to make it move.”

That sentiment has been echoed in numerous other parts of the country.  A source in the Midwest also noted that scrap flows have been slow, whereas a second source in that region said that shredded raw material inflow has been slower than anticipated.

A Pittsburgh-based source said that scrap flows in his region are awful.

Also, of note, news that Turkey’s import scrap market has continued its uptrend in a new ex-US deal. According to market sources, while some sources in Turkey feel that Turkish producers are inclined to show resistance to the ongoing price uptrend, price inquiries in Turkey’s import scrap market have increased, and scrap suppliers believe this is another signal that prices will continue to rise.

If cargo prices into Turkey continue to rise, and East coast exporters are forced to raise their dock prices to improve their inflows, this could also impact domestic prices during next month’s buy cycle.

“I think if you look at the overall snapshot that we have today, all signs seem to point to slightly higher prices in September,” a final source said. “On the other hand, flat rolled [prices are] still soft, [finished steel] lead times are still short, and I don’t see anything in the market that points to any significant moves in either direction.  I definitely don’t see [scrap] prices going down, but I also don’t see anything that points to prices spiking up.”


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