How long before US scrap prices peak?

Domestic scrap prices in the US are maintaining their upward movement due to the continued strength of the export market and the low domestic inventory levels of the last five months. Currently, the domestic scrap market is very strong as there is significant demand from the mills. All of the major steel mills in the US are buying, including one of world's largest electric arc furnace steelmakers, Nucor. Moreover, the low scrap inventories over the past several months have put pressure on scrap prices to rise. Inventories have been low because the current harsh winter conditions make it difficult to collect scrap, and because the existing scrap supplies were nearly depleted. Scrap consumers will not see high inventories until early summer. Therefore, we expect that the domestic pricing trend will continue to go up for the next two to three months, as there is no apparent reason for it to drop before then. Domestic scrap prices have been climbing up since the beginning of the year. In February, both busheling and shredded scrap increased an average of $40 /long ton, while HMS I and II went up an average of $25 /long ton. Busheling prices now range from $300 - $310 /long ton, while shredded goes for $290 - $300 /long ton. HMS I ranges from $250 - $260 /long ton, while HMS II ranges from $248 - $258/long ton. The scrap export market is still very strong, as demand from Asia is increasing. Turkey, China and South Korea import strongly from the US. Current FOB ship prices for shredded scrap range from $285 - $295 /mt while HMS 1& 2 mixed ranges from $270 - $280 /mt. Insiders predict that the FOB ship prices will go up $15 - $30 /mt in the next three months. SteelOrbis is informed that a Turkish mill has concluded a booking of two scrap cargoes ex-US. The cargoes are composed of a total of 35,000 mts of shredded scrap booked at $330/mt CIF Iskenderun, a total of 22,000 mts of HMS I/II 80:20 booked at $325/mt CIF Iskenderun and a total of 18,000 mts of PNS scrap booked at $337/mt CIF Iskenderun. The most recent USITC data available show that during the month of December, 2006, the top recipients of shredded scrap from the US were: Turkey at 102,000 mt, Thailand at 62,000 mt, Mexico at 40,000 mt, and both Egypt and Italy at 37,000 mt. Taiwan and India also imported some from the US. Greece, Malaysia and Korea, which imported some tonnages of shredded scrap from the US in November, did not import any shredded scrap tonnage from the US in December. However, Thailand and Italy, which did not import any shredded scrap tonnage from the US in November, imported a significant amount in December. The top importers of HMS 1 grade scrap from the US in December, 2006, were: Turkey at 151,000 mt, Egypt at 26,000 mt, and Malaysia at 24,000 mt. Some other countries which imported HMS 1 grade scrap from the US in December include: China, Korea, Taiwan, Indonesia, India, Japan, Mexico, and Vietnam. The total amount of ferrous scrap exports from the US in December totaled 707,000 mt, 110,000 mt less than the amount exported in November. Total US ferrous scrap exports for 2006 reached 9,487,000 mt - a drop of 3.1 percent when compared to the figure of 9,791,000 mt for 2005.