In the recent August buy-cycle, US domestic ferrous scrap prices in the East coast and Midwest trended down $20-25/gt ($20-25/mt) on cut grades such as shredded, P&S, and HMS I while busheling, a prime grade, declined up to $10/gt ($10/mt) in some trades.
According to a mid-month SteelOrbis survey, sources are finding their ability to forecast for September difficult and “confusing due to external and non-traditional factors.”
A source noted that “no amount of wisdom and industry experience can ensure certainty in what September will bring.”
Despite the forecasting challenges, the preliminary consensus from industry sources in the East coast, Midwest and central US regions through communications with SteelOrbis is that US domestic scrap is destined to trend down in the September buy-cycle. Shredded, P&S, and HMS I scrap are expected to again decrease around $20/gt ($20/mt) while busheling scrap is expected to trend down up to $10/gt ($10/mt) in some trades.
An Eastern source commented that the export effect on the East coast may worsen through the month, thereby further increasing scrap supply inland which may place an additional downward pressure on prices of $5/gt ($5/mt). Yet, he also countered that transportation difficulties and financial considerations by shredders, which are being affected by lower prices on non-ferrous products, may limit inland sells.
Sources also noted the consideration of some downward pricing pressure on US steel goods as a driving force for mills to adjust raw material prices downward in September.
Interestingly, despite the downward trend expectation in September, several sources noted that US domestic scrap may experience a pricing rebound in October. They referenced the strong economy and strong steel demand.