Following January’s sideways to $20/gt higher scrap settlements, the early outlook for February scrap is seen sideways to higher, scrap market insiders told SteelOrbis this week.
During the January buy cycle, Midwest and Southeast scrap prices settled $20/gt ($20/mt) higher than their December counterparts, while pricing on the US East Coast was reported sideways to December values on less spirited export scrap demand requirements.
“We’re hearing sideways to slightly higher for February,” said one Midwest scrap insider. “While I see it higher, I don’t think the market will get crazy."
“There’s a pretty good chance that the scrap market will be up for February,” said another market insider. “Right now, I would say the weather is likely to push prices up, and once we’re done with the snowy and cold weather, prices will have to remain high to maintain traction.”
While all contacts agreed pricing was likely higher in February, a continuation of recent cold weather will be key.
“We’re not hearing anything out there for February just yet, however, we’re waiting to see how this recent cold weather affects scrap supply,” a third insider told SteelOrbis.
Recent reports indicated a combination of weather-related transportation issues and low scrap supply at scrap collection points helped to drive higher January scrap values, even as demand for finished steel products remains subdued thus far in the first quarter.
Contacts said this week steel prices in flat and long steel markets could begin to increase as a result of recent steady to higher January scrap values.
“I think scrap will be a really good excuse to keep prices high at flat mills,” said one flat steel market insider. “Couple that with the Trump affect, and I think we’re on a launch pad (for prices). It will not be a rocket launch, but rather a Boeing take off; steady and slow.”
Based on a sideways to higher January settle, February Ohio Valley HMS 1 could settle at or above $340-360/gt ($345-366/mt) delivered to customer, while shredded scrap is expected to settle at or above $395-400/gt ($401-406/mt) on a delivered basis. P&S is likely to settle at or above $385-$395/gt ($391-401/mt) delivered to customer, while prime busheling scrap is seen at or above $410-435/gt ($417-442/mt) delivered to customer.
In the US Northeast, February HMS is seen near $335-350/gt ($340-356/mt) delivered to customer, while shredded is likely near to $365-375/gt ($371-381/mt) delivered. P&S is seen at $335-345/gt ($340-351/mt) on a delivered basis based on a sideways expectation, while prime busheling scrap is likely to settle at $390-410/gt ($396-417/mt) on a delivered to customer basis, market insiders told SteelOrbis.