January Ohio Valley scrap is now discussed $20/gt higher this week across all grades, as the January buy cycle continues, though earlier claims that prime grades could move even higher than that might not be realized, market insiders told SteelOrbis this week.
Scrap is moving higher, insiders said, because of improved demand from local mills, and because recent cold and snowy weather is expected to further reduce already low scrap inventories at many Midwest scrap collection facilities. Insiders say the combination of recent low offered prices to scrap paddlers at yards with cold weather continues to limit available inventory.
“Many scrap sellers would rather wait right now than sell their scrap at current depressed yard prices,” one Midwest scrap insider told SteelOrbis earlier this week. “As a result, there’s not a lot of material available out there.”
As mills slowly began to emerge for their January scrap requirements, sellers, aided by recent cold weather, seemed to gain the upper hand.
“It appears the market is up $20/gt across the board, but we’re hearing resistance on primes to get plus $30/gt.” remarked one Midwest scrap supplier. “The weather in southern Ohio, and Kentucky has been horrible, and all business was shut down due to the recent severe weather. We’ve seen the worse snowstorm in a long time, which is making it challenging to get product to the mills in a timely fashion.”
US trucking company reports indicate the recent winter storm Blair has halted or disrupted trucking operations in Kentucky, Missouri, Illinois, Indiana, Ohio, West Virginia, Virginia and Maryland, according to carriers’ service advisories.
Extended forecasts from the US Weather Service indicate many areas that saw significant snow from Blair will see more snow less than a week later as winter storm Coral is expected to bring snow as far south as Atlanta, Georgia later this week. The Weather Service said a developing La Nina weather pattern is expected to bring wintry conditions to many states that don’t normally see snowy conditions.
“I am still hearing plus $20/gt for January Midwest scrap, though nothing has been printed,” said another Midwest scrap insider, commenting on the sketchy nature of recent scrap market activity.
While the January settles were not available as of press time, based on a plus $20/gt January scrap increase, Ohio Valley HMS 1 could settle at $340-360/gt ($345-366/mt) delivered to customer, while shredded scrap is expected to settle at $395-400/gt ($401-406/mt) on a delivered basis. P&S is likely to settle at $385-$395/gt ($391-401/mt) delivered to customer. Prime busheling scrap is seen at least $20/gt higher at $410-435/gt ($417-442/mt) delivered to customer.
In the US Northeast, January pricing has not yet been fully assessed and is last reported sideways to December values with HMS last reported at $335-350/gt ($340-356/mt) delivered to customer, while shredded is last at $365-375/gt ($371-381/mt) delivered. P&S is last seen near $335-345/gt ($340-351/mt) on a delivered basis, while prime busheling scrap is likely to settle at $390-410/gt ($396-417/mt) on a delivered to customer basis.