How will the US domestic scrap market trade in September?

Friday, 09 August 2019 00:34:46 (GMT+3)   |   San Diego

During the recent August settled prices in the US domestic scrap market, prices settled up $20/gt ($20/mt) across most grades and across all regions. Sources noted that mills and scrap sellers negotiated the mutually acceptable gain easily in the early trading week. Analyzing September, SteelOrbis has been informed by several sources that the early week of the month is likely to trade strong sideways with the potential of gaining $10/gt ($10/mt). The chance of a repeated $20/gt ($20/mt) increase in September was considered remotely possible, but not likely, on the basis that the overall consumer market is exercising “a cautious optimistic perspective for the remainder of 2019.”

Several scrap dealers including those who transact business in Canada and Mexico noted a tone of “reserved optimism” throughout the three countries. Overall steel demand is considered strong throughout North America, but the construction and automotive industries in each country are noted as “slightly soft compared to a year ago.” In the case of Mexico, consumer confidence is being negatively influenced by the fiscal changes that are either being made or promoted within the country by the new political party in power. Several sources expressed the expectations of possibly another $10/gt ($10/mt) increase in October and then sideways to strong sideways moves for November and December.

One source said, “Barring any dramatic event change in Australia, China, Turkey or within North America, I expect a steady and overall positive business environment in steel and, therefore, scrap.” A separate source noted that Turkish finished steel is likely to remain subdued while emerging markets are “shuffling with their growth and political plans” that may also keep scrap exports at consistent flows for the remainder of the year. A third source stated, “I see steady markets for the remainder of 2019 and possible gains for finished goods beginning in 2020.”

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