The June scrap market, following the June 4 start of new Section 232 steel and aluminum tariffs by the US Trump administration, is now seen settling sideways to about $10/gt less than equivalent May scrap negotiated values, market insiders told SteelOrbis this week.
The June call, throughout the weeks leading up to the start of June supply negotiations, has strengthened overall, insiders say, from one of steady to potentially $20/gt less, mostly on reports of solid domestic inventory and expectations for limited export scrap requirements, to one of “sideways at best to down $10/gt.”
“I have been hearing that scrap will be sideways to down slightly from May levels in June,” said one Gulf Coast scrap insider. “But for sure, the recent tariff increases add even more uncertainty to the market as the situation could change next week.”
Finished steel insiders tell SteelOrbis that growing uncertainty over President Trump’s on-again-off-again global tariff policy may be further delaying the start of important domestic infrastructure projects which could be supportive for domestic steel pricing. SteelOrbis historical data shows local HRC pricing has declined nearly 25 percent since reaching a high of $950/nt ($1,047), or $47.50/cwt., on March 22, while during the same period, domestic rebar pricing has dropped 6.75 percent from $40.75/cwt., ($815/nt or $898/mt) to $38.00/cwt., ($760/nt or $838/mt).
“We’re hearing now the expectation for a sideways summer, and maybe trending higher later if these tariffs hang around,” said one Midwest mill scrap buyer. “Suppliers of course, are going to try to push the narrative of up (for prices), but almost every supplier that I talk to is saying sideways in the best case.”
“The demand trend is down,” noted another Gulf Coast rebar insider that follows the scrap market for pricing clues. “I think June will end up more sideways as a result of low mill demand and new tariffs.”
During June scrap negotiations, no May scrap cancellation orders, nor posted price decreases from domestic mills were noted.
“All the June scrap markets now appear sideways,” yet another scrap insider told SteelOrbis as this report went to press.
While June buy-cycle negotiations could conclude with settles available as early as tomorrow, June 6, a sideways to $10/gt less versus May settlement call would peg US Midwest prime busheling scrap in the Ohio Valley steady to $10/gt less than the $435-460/gt ($443-468/mt) May settle, while shredded scrap could settle at or $10/gt below the $375-380/gt ($381-387/mt) settle. Ohio Valley P&S and HMS grades could settle at to $10/gt below the $361-371/gt ($367-377/mt), and $325-345/gt ($330-387/mt) May settles, respectively, scrap insiders said.
In the US Northeast, while no grade-specific forecasts were noted as of press time, a sideways to down $10/gt June scrap expectation would yield US Northeast busheling scrap at to $10/gt below $380-400/gt ($387-407/mt), while shredded grades could settle at or $10/gt below $325-335/gt ($330-342/mt). P&S and HMS grades could settle at to $10/gt less than the May settle of $295-305/gt ($300-310/mt), and 305-320/gt ($310-325/mt), respectively, scrap insiders said.