How will US domestic scrap trend in February?

Tuesday, 29 January 2019 01:26:21 (GMT+3)   |   San Diego

As the month ends, sources close to SteelOrbis have updated their expectations for February after recent Turkish import buys at higher prices.

After the January buy-cycle that trended down more than expected, sources were expressing expectations of soft sideways to a decrease of up to $10/gt ($10/mt) in February due to good weather conditions, strong incoming feedstock into scrapyards, and limited bulk sales to the export market in the East coast. Over the past week, SteelOrbis has reported on the flurry of scrap import purchases by various Turkish mills at improved prices. However, the ongoing severe winter storm in the Midwest and East coast, along with current export activity, has moved expectations for February scrap trading sideways to potentially upward in those respective regions. One source noted that strong demand and recent mill efforts to increase finished steel products may allow prices to increase by $5/gt ($5/mt). A separate source, however, noted that he could “see a same-as-last-month pricing” trend and would be surprised at higher prices.

A source in the Southwest and another in Texas agreed that Northern US prices were likely to trend firm to slightly up, but that in their region, mills will likely seek to “press prices slight down by $5/mt” due to adequate onsite inventories and sufficient scrap in the market.

According to an East coast source, US scrap exporters are currently offering HMS I/II 80:20 at $310/mt CFR Turkey or higher which shows "some tightness in the international scrap market." The source noted that active Turkey buys reduced the possibility of exporters panicking and dumping scrap for inland consumption during the February scrap cycle. Several sources commented that a panicked exporter put additional downward price pressure on the market during the January scrap buy cycle.  

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