The market outlook for August scrap pricing has resumed its previous sideways direction, market insiders told SteelOrbis today, following yesterday’s late announcement from the Trump administration that key pig iron exports to the US from Brazil would be exempt from threatened 50 percent tariffs.
The announcement comes a day before the president’s self-imposed Aug. 1 deadline for US trading partners to have negotiated individual tariff levels with Washington. So far, only 11 countries and the 27-nation European Union have negotiated individual tariff rates with the US as part of Trump’s “Liberation Day” tariff scheme announced April 2. The initial tariffs, some as high as 50 percent, were expected to go into effect a week later on April 9, though Trump later ordered a 90-day “pause” terminating Aug. 1, to afford countries the time necessary time to negotiate their tariff rates.
Scrap market insiders told SteelOrbis, the likelihood that Brazil’s key exports of pig iron -used by US steel producers in traditional blast furnaces- would be subject to 50 percent tariffs, caused many to expect the likelihood of higher scrap prices during the upcoming August scrap buy cycle, as US steel producers would likely need to increase their scrap purchases as a short-term replacement.
“It looks like the markets may move sideways in lieu of the exempt tariffs on Brazilian pig iron,”’ said a Midwest scrap market insider. “We still feel, however, that there may be some upward momentum, given the optimism that exists in the steel business today.”
Given an updated sideways August scrap call, US Midwest prime busheling scrap in the Ohio Valley is likely to settle at $435-460/gt ($443-468/mt), while shredded scrap could settle at $375-380/gt ($381-387/mt). Ohio Valley P&S and HMS grades are seen steady to July levels at $361-371/gt ($367-377/mt) and $325-345/gt ($330-387/mt), respectively, scrap insiders told SteelOrbis. If the August sideways outcome comes to fruition, US domestic scrap prices will have remained virtually unchanged since mid-May.
In the US Northeast, a sideways August scrap call would peg prime busheling grade material at $380-400/gt ($387-407/mt), while shredded grades could settle near $325-335/gt ($330-342/mt). P&S and HMS grades might finish near $295-305/gt ($300-310/mt) and 305-320/gt ($310-325/mt), respectively, stable to July levels, scrap insiders told SteelOrbis this week.