January scrap in the US is seen continuing the recent steady to upward price trend following last week’s December buy-cycle settles which saw prices up $10-20/gt over all domestic ferrous scrap grades, market insiders told SteelOrbis this week.
During recent December monthly scrap supply negotiations, December scrap pricing rose amid reports that supplier inventories were more limited than prior months because inflows dropped as a result of recent cold and snowy weather in the US Midwest, even as US mills purchased more scrap in December as steel production facilities returned to operation following the completion of annual maintenance operations. Improved export scrap sales also boosted requirements for US East Coast supplies, they said.
“I heard plus $20/gt to plus $40/gt from two mills, but it’s kinda too early to tell,” remarked one US East Coast scrap insider. “Demand is slowing due to seasonality.”
Direct SteelOrbis conversations with domestic mill scrap buyers found the majority think pricing for January will be sideways. “Mills will stand firm at sideways come January I suspect,” said another Midwest scrap insider. “While dealers will continue to try to ride December’s ‘up train’ on pricing into January.”
“We’re hearing very little new on January scrap,” remarked another Midwest scrap dealer this week. “The expectation, however, is that it will be up, though.”
Similar to one week ago, based on an average $30/gt January increase in Midwest shredded scrap pricing, the grade is seen settling as high as $415-420/gt ($421-425/mt) delivered to mill, while busheling scrap which gained $10/gt during December negotiations, could settle near $425-435/gt ($431-441/mt) if higher expectations prove true. In Ohio Valley HMS and P&S grades, a $30 average January price increase could net settles at $365-385/gt ($370-390/mt), and $401-411/gt ($407-4317/mt), respectively, on a delivered to mill basis.
In the US Northeast, scrap insiders said a continuation of increased export demand could boost January scrap values as importers buy an increased amount of US supply towards their higher February scrap requirements. January shredded grades are seen potentially up on average $30/gt on a delivered to mill basis from $10/gt higher December settles at $365-375/gt ($371-381/mt), while busheling scrap could settle on average $30/gt higher at $380-400/gt ($385-405/mt). For cut grades, a $30 increase would net January settles near $345-360/gt ($351-365/mt), for HMS I/II, while P&S scrap could settle $30 higher near $330-340/gt ($335-345/mt).
“I’m hearing about $30/gt higher for January scrap,” said a final SteelOrbis scrap insider. “I’m also hearing that finished products will be up $40/nt for January. That’s the latest buzz.”
Much of the anticipated January scrap and finished steel price increases, insiders said, could depend on whether National Weather Service short-term forecasts for an increased amount of cold and snowy weather in the US Midwest and Northeast regions proves true early this winter, and whether US mills, following a December scrap price increase, have much of an appetite left to absorb the additional cost of higher January scrap given a normal seasonal drop in demand with the Christmas and New Years holidays coming soon. Additional steel production price increases, they say, could net additional finished steel price increases that might encourage a further influx of imports.