Canadian domestic scrap prices changed minimally in July, with contacts in Ontario and Quebec calling them inconsequential. Contacts in Canada mentioned that a true reflection of variances in currency exchange fluctuations between the Canadian and US dollar would have pushed all grades up C$10/nt ($7.1/nt) at least, yet prime grades remained unchanged in the country.
For August, participants expect scrap generation to decrease due to seasonal trends. Some car plants are expected to enter scheduled maintenance shutdowns during that month, limiting scrap supplies, which are not considered generous at this point. In Quebec, construction activity is expected to be paralyzed for two weeks, also limiting scrap generation (yet could also affect domestic steel consumption). Additionally, mills in Canada could look in August to restock their scrap inventories as they head towards the winter season, where cold weather hinders scrap generation. Overall, the projections for August are of a possible modest increase of C$10-15/nt ($7.1-10.7/nt) for scrap grades.
In the meantime, in Toronto, the prices for prime grades remained static, with #1 busheling at C$565/nt ($402/nt) delivered consumer and bundles at C$570/nt ($405.6/nt) delivered. HMS I increased by C$5/nt ($3.6/nt) to C$455/nt ($324/nt) delivered, and P&S 5ft rose by the same margin to C$485/nt ($345/nt) delivered. Machine shop turnings (MST) stayed unchanged at C$365/nt ($260/nt) delivered.
The small change in cut grades was reported as following a small adjustment in relation to the “tri-city” price levels in the US, composed of Chicago, Pittsburgh, and Cleveland. Mills in Canada are currently more interested in purchasing the more inexpensive cut grades, which has motivated them to raise the prices for those grades, if only marginally. Prime grades are currently not popular with Canadian mills, according to sources, due to being relatively expensive.
Scrap demand nationally is reported as stable, as the Canadian steel sector has had its challenges with the US steel import tariffs. Algoma Steel reported positive steel sales for its Q2 period, which could indicate a long-term independence from US imports. But for now, these positive results have offset the trade challenges and maintained a balance in the scrap market.
In Montreal, the price of #1 busheling trended sideways at C$250/nt ($178/nt) delivered consumer while HMS I increased by C$5/nt ($3.6/nt) to C$320/nt ($228/nt) delivered, and P&S 5ft rose by the same level to C$360/nt ($256/nt) delivered. MST was unchanged at C$245/nt ($174/nt) delivered, and shredder feed stayed put at C$185/nt ($132/nt) delivered.
As far as such small increases being inconsequential, contacts in Canada mentioned that mills usually announce at least C$10-15/nt ($7.1-10.7/nt) increases when they are looking for more material or C$10-20/nt ($7.1-14.2/nt) drops when they want to keep their scrap inventories in check. They mention that increases below C$10-15/nt ($7.1-10.7/nt) do not motivate recyclers who maintain healthy scrap inventories to release more material. The scrap market in Canada is at a balanced level for now.
$1 = C$1.41
