As the end of April approaches, the consensus among scrap buyers and sellers in the US domestic scrap mart is an expectation for a downward price shift in the early May trading week. The exact magnitude of that shift is wide at the moment with expectations of down $10/gt to $30/gt depending on grade and region. Sources inform SteelOrbis that prime grades such as busheling are slated to face the least price erosion as pig iron imports are presently quiet and the DRI plant in Louisiana has recently announced a planned outage.
Shredded, HMS I, and P&S scrap prices are expected to decline from $15-30/gt ($15-30/mt). Those with expectations of a more limited decline of $15/gt ($10-15/mt) note that the oversupply in scrap is “not extensive” and expect larger quantity buys given the "extreme contraction by some mills in the April buy period." Given the spring season, the market participants expect a slightly higher feedstock of scrap into scrapyards throughout May. While export scrap prices have trended generally sideways for Turkish mills, the limited volume of scrap exports to Turkey is expected to leave a slight overhang of scrap inventories at ports. Emerging markets such as India, Pakistan, and Bangladesh encountered firm to slightly up import scrap price movements this week but with limited deals.
Sources report that given the downward pressure on Japanese domestic and export scrap prices, US scrap sellers remained mostly quiet in Vietnam and South Korea this week.
Several sources noted that the overall economy and high mill utilization rate should support US domestic scrap prices into the summer after the May price adjustment. One source added, "I think May will bring us to equilibrium given the seasonal effect, a common factor in the market, but overall the scrap outlook for the year is positive."