The US June scrap buy-cycle encountered primarily a sideways movement on obsolete scrap grades such as shredded, HMS I, and P&S, while some sources in Texas reported a price erosion of $10/gt ($10/mt) on HMS I and P&S. Prices on obsolete grades in the Southeast, which were trending higher than the Midwest, trended sideways or slightly soft on “slight correction,” but demand was reportedly strong. Regions such as the Midwest encountered a solid increase of $10/gt ($10/mt) on prime scrap grades such as busheling while the increase on the grade was $0-5/gt ($0-5/mt) in other regions.
For July, the forecasts from sources have ranged from “likely repeat from June” to “sideways with limited downward regional corrections” to “potential increase of $10/gt ($10/mt) across the board and even maybe a $20/gt ($20/mt) increase on busheling scrap.” As the end of month approaches, sources are cementing expectations on sideways to a positive $10/gt ($10/mt) move on scrap prices, especially given the strong export prices and overall tight global scrap market.
During July, industrial scrap supplies are expected to decrease due to planned maintenance outages at many automobile related plants, therefore, demand for busheling scrap is expected to be strong. Yet, several sources point to planned outages also in tandem at some steel making mills and advanced planned inventory positions by mills that may limit a surge in prime scrap prices.
Several sources report adequate feedstock into scrap yards, strong demand, and continued transportation challenges that are keeping mill buyers from placing downward pressure on scrap prices, as they want to assure proper scrap feedstock at production facilities, especially at a time of increased productivity at sites. Large mills have reportedly also continued purchases of imported scrap and are returning to purchase imported pig iron, thereby limiting a dramatic surge for domestic scrap prices.