US domestic scrap dealers are still “seeking to read the market” regarding expectations for the October scrap buy-cycle. After the surprise shift to sideways trading in the September buy-cycle from an expected upward price move of $20-30/mt, inland scrap dealers inform SteelOrbis that the US domestic scrap market, while showing signs of continued strength, is also being affected by cautious domestic mill buyers and adequate-to-surplus scrap inventory levels. Therefore, “in the midst of various levels of uncertainty and the scrap price factor in finished steel goods prices, the market may move sideways again in October,” stated a Midwest scrap source. A separate source stated, “This would be a good time for better clarity into Section 232, economic infrastructure investments, or tax benefits for capital investments not because anything bad is expected—the domestic situation looks good overall—but because we have positive momentum.”
While the East coast market did encounter an increase of $10/mt on shredded and over $20/mt on HMS I on export competition, the export outlook, especially as it relates to Turkey scrap deals, “is looking soft into mid-September.” An East coast trader noted the recent ex-US $350/mt CFR Turkey deal on HMS I/II 80:20 that decreased $3/mt from a previous August 11 deal. Additionally, he informed SteelOrbis of the potential for sufficient scrap supplies that will become available from the Texas and Florida flood affected areas in the next few months. A separate source stated, “I can see the potential for $340-345/mt CFR Turkey on HMS I/II 80:20 in late September as Turkish mills deal with decisions on scrap buys given the higher electrode costs, surplus scrap opportunity from flooded regions, and sustainability of both their domestic and export prices on finished steel.”
The US scrap export market has received support from the Japanese H2 export scrap market along with active scrap buys by mills in South Korea, Bangladesh, and other emerging markets.