After the large dip in export scrap prices in January led by the deals with Turkish mills, US domestic scrap prices were expected to decline $25-40/mt and possibly even more this month. Some sources close to SteelOrbis expressed concerns prior to the February buy-cycle that any element of pessimism could move shredded deals down $35-45/mt inland.
Early in the buy-cycle, dealers began communicating a firm stance of unwillingess to move prices down to such deep levels. Mills also did not want to make excessively low offers that could move prices in a way that would affect their own finished goods sales as buyers would request further discounts in line with drops in raw material prices. Additionally, increased production plans at mills required them to obtain sufficient volumes during the February buy period. According to a contact in the Midwest, "I would add that mills seem to be melting more, which is a good thing, despite the loss of some export pricing support."
As a result, throughout the February buy-cycle, some mills lagged entry and the negotiation period that started in the middle of last week, which usually lasts a few days, was prolonged until the middle of this week. Inevitably, due to the dampened export prices, domestic prices moved down, though the settled prices exceeded initial expectations. Busheling prices only declined by $10-15/mt and shredded moved down $25-35/mt.
The inland regions lagged settling as dealers held firm on limiting scrap price declines in light of relatively strong domestic demand. Scrap dealers noted that, unlike during the early January buy-cycle when prices softened through the trading period, prices firmed up from the base that was established in early trades during the February trading period.
| Feb 8 (delivered to customer) | Ohio Valley | Midwest |
| HMS I | $264-269/mt $260-265/gt | $284-290/mt $280-285/gt |
| Shredded | $284-290/mt $280-285/gt | $295-305/mt $290-300/gt |
| Busheling | $315-325/mt $310-320/gt | $320-325/mt $315-320/gt |
| P&S | $279-284/mt $275-280/gt | $284-295/mt $280-290/gt |
Compared to the previous month (January 2017) when SteelOrbis reported the settled prices, changes are as follows:
| Change m-on-m | Ohio Valley | Midwest |
| HMS I | -$31/mt
| -$26/mt -$30/mt |
| Shredded | -$36/mt -$35/mt | -$30/mt |
| Busheling | -$15/mt -$10/mt | -$10/mt -$10/mt |
| P&S | -$31/mt
| -$26/mt -$20/mt |
Note: mt variance noted in relation to change from previous month’s range. When two number are present, the top number denotes change from the bottom of the previous range and the bottom number denotes the change from the top of the previous range.
Additionally, SteelOrbis has learned that the Southeast region also held strong through its negotiation period. Shredded sold down $25/mt ($25/gt) or approximately at $299/mt ($295/gt) delivered to customer early in the week. Since Monday, prices firmed up from the early trades and prices for shredded scrap are being called settled at $299-305/mt ($295-300/gt) delivered to customer in the Southeast