Although most players within the US domestic scrap market agree that July scrap prices are unlikely to settle until after the July 4 holiday, conversations indicate that for the most part the market is trending soft.
On the East coast, sources believe that HMS and P&S scrap will settle at down $10/gt ($10/mt), with shredded and busheling scrap to settle down $10-$20/gt ($10-$20/nt). “Export is down, and the mills aren’t expected to buy much shred this month,” a source said.
Sources in the Pittsburgh / Great Lakes region say that at current, it seems as if the market will trade at sideways on cut grades, and down $10-$20/gt ($10-$20/nt) on prime.
In the South and Southeast, it’s believed that prices could settle at down $10/mt ($10/gt) for cut grades, and down by “at least $20/gt ($20/mt) for busheling. Busheling scrap prices are also expected to trend down in Chicago, “but down by how much is anyone’s guess.” One source said he’s heard that busheling could go down by $30-$40/gt ($30-$41/mt), although others are pegging the market at down $20/gt ($20/mt).
The increased softness in busheling, sources note, is due to supply and demand levels balancing out. “Busheling is no longer in short supply now that the automakers are back online,” another source added. “The spread between primes and cuts was too big, so I don’t think anyone is surprised that busheling is coming down this month.”
As for where prices will ultimately settle, sources don’t believe there will be too much variance between today’s prices and the final, settled prices. Short finished steel lead times and mills’ still-depressed capacity utilization rates, which were reported at 55.4% for week ending June 27, are a contributing factor.
“We don’t think there’s going to be a lot of change between the early numbers and the settled numbers,” a source said. “Finished steel prices are on the soft side; export prices are down and the [East coast] docks have dropped their peddler prices. All in all, what’s happening with scrap seems to be in line with what’s happening with the rest of the steel market.”