Expectations for domestic scrap pricing during the May buy-cycle were predominantly sideways to soft-sideways through April and affirmed as the month came to an end. The lack of ex-US export deals to Turkey provided an unknown variable regarding the potential for additional supplies offered by exporters to inland markets.
A few sources expressed the belief that P&S and shredded scrap could move slightly up as a result of the wide $70-80/mt spread between shredded and prime scrap grades achieved in the April buy-cycle. Additionally, several sources noted the decreased ability of exporters to flood the market with shredded scrap regardless of overflow inventories as a result of railroad transportation logistics that are limiting guaranteed May deliveries to the inland regions.
A recent ex-US deal to Turkey at $280/mt CFR on shredded scrap and confirmation of continued strong demand for prime has resulted in early negotiations trending sideways to up on some grades, depending on region. Several sources on the East coast and Pennsylvania regions have informed SteelOrbis of early deals on prime grades up slightly and sideways pricing on cuts and shredded scrap. Simultaneously, sources in Ohio have informed SteelOrbis of early bookings of shredded scrap up $10-15/mt while discussions continue sideways on prime scrap grades.
A scrap dealer in Ohio stated, “Some mills still have not bought and may find they may have to stretch beyond their normal drawing area to cover their requirements.” A separate source noted that, due to the spread between shredded scrap and busheling, shredded is being viewed by some buyers as a better buying opportunity.
The May buy-cycle is expected to begin settling by Friday, May 5 through early next week depending on region. SteelOrbis will report settled pricing as data becomes available.