March scrap pricing in the US Midwest is seen up between $30-40/gt ($30-41/mt) from February settles as inventories continue to be reported at low levels at both mills and suppliers, though a few contacts predict some sales could be done as high as $80/gt ($81/mt) premiums over February settles as continued cold weather and equipment-related problems continue to impede the processing and delivery of local scrap, market insiders told SteelOrbis this week.
Some Midwest mills remain conservative regarding likely March price increases. “I think we’re going to be up $30-40/gt from February,” one mill contact said.
At this week’s Recycled Material Association (ReMa) Consumer’s Night scrap conference in St. Louis, Missouri, scrap contacts told SteelOrbis that continued slow manufacturing activity in the US continues to reduce the amount of available prime busheling scrap. Most expect US scrap pricing to continue strong across all grades, especially if recent cold weather in the eastern two-thirds of the US continues.
“I have access to a whole lot of new steel (automotive) rotors that were deemed defective that will be available as busheling scrap for March,” one contact told SteelOrbis. “I think the US scrap market is likely to be really solid over the next several months.”
A US East Coast market insider surveyed before the ReMa conference earlier in the week was less enthusiastic about scrap pricing.
“Every year for the past 50 years, we see scrap prices rise during the winter and then decline as spring nears,” he said. “Right now, for the month of March, US mills are at $40/gt higher in the Midwest for auto-shredded scrap, however on the US East Coast, Turkey is not coming in and setting the market like they used to, with demand and production off, so it is harder to get a handle on monthly pricing.”
“We’re hearing that another mill in the Chicago market is out of scrap,” remarked a Midwest scrap supplier. “We hear that some mills are willing to pay upwards of $80/gt from February (settles) to secure 20,000 tons of (shredded) supply. Mills don’t have inventory right now,” he said.
While no concrete market consensus is yet forthcoming for the March US East Coast scrap market, following February’s $20/gt ($20/mt) increase, it’s also problematic at this point to assess with much confidence where March US Midwest pricing is likely to settle given this week’s wide range of March price expectations. One thing seems certain though, that unless spring arrives in a hurry and demand for scrap at mills is quenched, it’s likely busheling scrap prices in the US Midwest could continue their advance above the $500/gt ($508/mt) level.
Based on a $30-40/gt increase from February monthly buy-cycle settles, Ohio Valley HMS 1 could settle near $410-430/gt ($417-437/mt) delivered to customer, while shredded scrap could settle near $465-470/gt ($472-478/mt) on a delivered basis. P&S is likely to settle near $456-$466/gt ($463-473/mt) delivered to customer, while prime busheling could settle around $490-515/gt ($498-523/mt) delivered to customer.
On the US East Coast, HMS could settle at or above the $355-370/gt ($361-376/mt) February delivered to customer settle, while shredded could settle at or above the $385-395/gt ($391-401/mt) delivered settle. P&S could settle at or above $355-365/gt ($361-371/mt) on a delivered basis, while prime busheling scrap could settle at or above $410-430/gt ($417-437/mt) on a delivered to customer basis.
