The expectation among market insiders for April scrap pricing seems to be one of soft sideways to as much as $40/gt less next month, off sharply from recent flat expectations, as supply at mills and local scrapyards is reported to be more than adequate to meet current demand levels, following recent first quarter price increases and better weather as spring temperatures arrive across much of the US, market insiders told SteelOrbis this week.
During the first quarter, scrap insiders told SteelOrbis that cold snowy weather in the US Upper Midwest, Northeast, South and Southeast had limited the amount of new scrap sold by sub-collectors to yards, causing limited availability during monthly scrap supply negotiations with local mills. Transportation of material to mills from yards also was said to have been hampered by extremely poor weather conditions and ongoing maintenance programs.
“Scrap is seen stable to down,” said one Midwest scrap insider. “Many people are waiting to see what the mills will do next week on April 2.”
April 2 begins the expected start of reciprocating tariffs by the US Trump administration. The tit-for-tat tariffs, as part of US president’s plan to be “more flexible,” is now likely to target the top 15 countries that currently maintain the highest trade imbalance with the US.
Market insiders also point to a potential recent peak for finished steel pricing as a reason for a steady to lower outlook for April scrap. This week, spot hot rolled coils are discussed at an average of $900/nt ($992/mt), or $45.00/cwt., off from $950/nt ($1,047/mt) or $47.50/cwt., one week prior. Market insiders said current flat steel price levels could be high enough to begin to encourage the entry of more imports, even with tariffs, therefore, many mills have been reluctant to continue to raise price offers.
Domestic steelmaker Nucor only increased its Consumer Spot Price (CSP) for HRC this week by $5.00/nt ($6/mt) to $935/nt ($1,031/mt), or $46.50/cwt, following earlier weekly price increases that approached $40/nt ($44/mt) at the end of February and the beginning of March.
Overseas, deep sea scrap prices for Turkey may have reached a peak and will likely move sideways in the coming round of bookings, market insiders told SteelOrbis this week.
During much of the most recent March scrap buying period, mills and traders in the US were bracing to potentially pay a 25 percent tariff on any scrap they purchased from Canada or Mexico. Prices settled up $20-$30/nt from February levels.
That tariff rate went into effect March 4 before two days later being paused for one month for imports determined to have a status in compliance with the United States-Mexico-Canada Agreement (USMCA), which included metals for recycling.
According to the US Census Bureau data aggregated by the US Geological Survey (USGS), from 2020 to 2023, 71 percent of imported ferrous scrap purchased by American steel mills and foundries came from Canada, while just 12 percent was shipped from Mexico.
It remains unclear what US president Trump will do with regard to Section 232 tariffs on Canada and Mexico, though some think he will make further concessions on tariff rates in an attempt to save the most important parts of his USMCA trade agreement he negotiated with Canada and Mexico in his first term.
Following the March buy-cycle, prime grades of March busheling scrap in the US Ohio Valley settled $30/gt ($30/mt) higher to $485-510/gt ($493-518/mt) delivered to mill, while shredded grades settled an average $25/gt ($25/mt) up at $455-460/gt ($462-467/mt) on a delivered basis. HMS and P&S grades showed a $20/gt ($20/mt) increase from settled February levels at $395-415/gt ($401-422/mt), and $441-451/gt ($448-458/mt), respectively, on a delivered to mill basis.
In the US Northeast, monthly scrap price expectations, which started the March buy-cycle period as high as $35/gt ($36/mt) premiums across all grades, moderated towards the plus-$20/gt level on a delivered basis as more supply became available from sub-collectors amid rising supplier offers at local yards and warmer weather-inspired inflows, insiders said. Better price expectations in Midwest markets also were said to have diverted a portion of that East Coast scrap away from local and export markets.