The US domestic market continues its monthly buy-cycle this week and is expected to settle tomorrow. However, the recent deals in the Midwest at discounts of $30/mt on shredded scrap and $40/mt on busheling are considered a trend that sources expect to remain steady until prices settle.
As discount prices were expected in the October scrap buy-cycle compared to the predominantly sideways September scrap buy-cycle, scrap yards began to decrease prices on incoming feedstock material. The situation was parallel at the docks as East coast exporters decreased prices in accordance with the fall in scrap export prices led by sales to Turkey. A source in Pennsylvania stated, “We seem to have reached an equilibrium in demand and supply through the recent price reductions.”
According to various sources, the present consensus regarding the US export scrap outlook is that scrap prices on HMS I/II 80:20 to Turkish mills will remain at $300-310/mt CFR through November. Additionally, finished steel prices are expected to remain stable or possibly increase upon the return of the Chinese traders back into the market next week.
While several sources acknowledged the concern that seaborne iron ore and coking coal prices may soften on slower Chinese demand, they also mentioned price support from the expected tighter supply of steel related raw materials in the Chinese domestic market and the possibility of “normalized” higher prices on graphite electrodes. SteelOrbis was informed of a statement made by GrafTech’s VP of Strategy Michael Carr that “recent graphite electrode price increases represent a rebound from record lows not necessarily a surge” pointing to the likely continuance of higher prices for the foreseeable future. GrafTech International is the leader in the graphite industry and is involved in three essential products related to the steel industry, namely, graphite electrodes, needle coke, and refractories.
An East coast exporter added, “Demand from emerging markets is expected to continue steady and India may finally return to importing scrap. They have been delayed but are expected to return before year-end. Therefore, the remainder of the year is probably stable to up in regards scrap pricing.”