The market outlook for August scrap pricing continues unchanged for a third week at sideways to July settlements, though new threats on July 9 by US President Trump to impose 50 percent tariffs on Brazilian pig iron could cause a scrap price run up next month, market insiders told SteelOrbis.
Recent estimates put US imports of Brazilian pig iron for US steel production at around 100,000 tons per month. Insiders say if that supply is unavailable due to proposed 50 percent tariffs by the Trump administration, US mills will have to buy more domestic scrap.
US domestic mill insiders cautioned recently 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 still seen sideways, they said.
“We’re looking at sideways for August scrap now, though tariff decisions that take affect on August 1 could define differently,” hinted one Midwest scrap insider. “I’m hearing sideways again for August and up in September potentially,” said another New York State based scrap dealer. “We have been hearing sideways to $10/gt up,” said yet another Midwest scrap insider.
While most insiders polled weekly by SteelOrbis said August scrap should settle steady to potentially higher, one dissenting opinion was noted concerning August scrap. “I’m expecting August to settle flat to down $25/ton,” the insider added. “Demand is flat to down during the heart of summer, and tariff deals are starting to be announced that should open up exports.”
Recent media reports indicate that a Brazilian delegation is hoping to meet with the Trump administration soon to discuss ongoing trade issues prior to the Aug. 1 tariff deadline, though no announcement was yet forthcoming from the US administration. Recently, Brazil warned President Trump that tariffs on the country’s exports and just-launched investigation into alleged “unfair” trade practices risk undermining a 200-year trade relationship, urging the US to resume negotiations on a “reciprocal” trade deal it says has been stalled since mid-June.
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.