August scrap pricing is seen unchanged at sideways to July settles this week, though scrap price stability next month could hinge on whether US President Trump decides to follow through on recent threats to tariff Brazilian pig iron exports into the US by 50 percent effective Aug. 1, market insiders told SteelOrbis this week.
As previously reported by SteelOrbis, US President Donald Trump notified Brazilian President Luiz Inacio Lula da Silva, that starting August 1, all imports from Brazil will face the additional 50 percent tariff at US customs. Steel insiders remain uncertain about the possibility of pig iron tariffs, as Trump has used tariffs as a negotiating tool in the past.
Pig iron is used extensively as a steel-making feed stock, with the US typically importing about 4-6 million tons of the material annually from Brazil, Russia and Ukraine. And, while the US has domestic blast furnaces capable of producing pig iron, they haven’t been competitive with imported material due to factors like costs and margins, experts say.
US domestic mill insiders cautioned that a failure by the Trump administration to insert a carve-out for pig iron exports from Brazil could cause US scrap prices -specifically prime and shredded scrap grades- to rise next month. Cut grades are seen sideways, they said.
“There’s not much chatter in the US scrap market for August,” said one Midwest mill steel insider, reporting the call unchanged at sideways. “A lot of the outlook for August pricing will hinge on pig iron tariffs.”
This week, Trump sent individual tariff letters to the four US’s major trading partners setting tariffs for Canada effective Aug. 1 at 35 percent; Mexico at 30 percent; Brazil at 50 percent, and South Korea at 25 percent.
During the July scrap buy-cycle, US Midwest prime busheling scrap in the Ohio Valley settled sideways to June at $435-460/gt ($443-468/mt), while shredded scrap finished monthly trade steady to June at $375-380/gt ($381-387/mt). Ohio Valley P&S and HMS grades settled steady at $361-371/gt ($367-377/mt) and $325-345/gt ($330-387/mt), respectively, scrap insiders told SteelOrbis.
In the US Northeast, the resulting sideways to June, July scrap settlement saw US Northeast busheling scrap finish at $380-400/gt ($387-407/mt), while shredded grades settled at $325-335/gt ($330-342/mt). P&S and HMS grades finished at $295-305/gt ($300-310/mt) and 305-320/gt ($310-325/mt), respectively, scrap insiders said.