Early in the December scrap buy-cycle, US domestic scrap prices increased $20/mt on busheling scrap and $30/mt on shredded scrap in most US regions compared to November settled prices. On the East coast, prices increased $20-21/mt on busheling scrap and $35-40/mt on shredded scrap on strong export demand.
Through the month of December, shredded scrap spot buys increased by up to $10/mt above early December settled prices in some inland regions as mills sought additional inventory in preparation for extended holiday operations. The cumulative increase of $40/mt compared to November settled prices on domestic demand is setting up January with positive expectations.
Additionally, with the latest ex-US export deal that garnered $370/mt CFR Turkey on HMS I/II 80:20, US domestic prices are expected to continue trending upward with support from export demand during the January scrap buy-cycle.
From sources on the East coast, Pennsylvania and Ohio, SteelOrbis has been informed that scrap prices are expected to increase $10-15/mt in January. While a few sources have expressed optimistic expectations of $20/mt and possibly even higher, those that agree on the lower $10-15/mt increase state that it is an unlikely expectation as “scrap inflow into yards has remained good and dealers are believed to have held back scrap inventory during the December sale.” Those that point toward the higher increase highlight the fact that Canadian scrap imports may not play as large a role in dampening prices in January as they did in December since Canadian mills have increased demand and will support prices at levels to retain scrap locally.
The forecast for US finished steel demand in the first quarter of 2018 is positive so far. Regarding finished steel imports, the US Commerce Department’s ruling on imported Chinese sheet steel products labeled as Vietnamese steel has provided an optimistic outlook to the results from the long-awaited Section 232 investigation of steel imports and their impact on the US economy, due on Jan 16.