March ferrous scrap pricing is expected to settle sideways to higher than recent February settles next month, as inventories are expected to remain low at both mills and suppliers, while new tariff announcements from the Trump administration could further reduce imports of steel and steel scrap at a time when domestic steel production is likely to increase, insiders told SteelOrbis this week.
Market insiders told SteelOrbis expectations for lower tariff-inspired steel imports could cause domestic mills to boost production, which will require more scrap. After Trump’s 2018 Section 232 import tariff announcements, domestic mills increased capacity utilization from about 75 percent in March of that year to about 80 percent in September. US capacity utilization averaged about 75.8 percent in 2024, with December estimated at 77.6 percent.
Scrap data from the International Trade Administration (ITA) indicates total imports of steel scrap from abroad amounted to 5.77 million metric tons for all of 2023, with Canada and Mexico, the US’ two largest trading partners, accounting for more than 4.9 million mt, or nearly 84.5 percent of the total. ITA data for 2024 shows yearly global scrap imports off 6.3 percent to 5.41 million mt, with Canada and Mexico accounting for nearly 4.9 million metric tons, or about 90.1 percent of the 2024 total.
In 2024, US scrap consumption is estimated at 51.5 million mt, so imports accounted for nearly 10.5 percent of US scrap consumption. In 2024, ITA data showed that the US exported 16.9 million mt of scrap abroad, so US scrap exports would need to decline by about 32 percent to make up the scrap import shortfall.
Trump’s reinstatement of Section 232 tariffs this week calls for a 25 percent import tariffs on Canadian and Mexican steel and scrap, beginning in March. It is expected that most countries will respond in kind with reciprocal tariffs of their own.
“We’re expecting to see a significant increase in capacity utilization on the part of domestic mills because of tariffs, though the increase could be faster this go-round because of consolidation in the US steel industry since (2018),” one steel market insider told SteelOrbis.
A mill contact confirmed that the outlook seems bullish thus far for March scrap.
“I think expectations are for pricing not to be down, and that there’s a good chance that prices could go up again, though not to the same extent that we saw for February.” the mill contact told SteelOrbis.
One Mexican steel insider was more specific about price levels, though he cautioned that it was still early in discussions about March scrap.
“I think scrap might be stable to $20-30/gt ($20-30/mt) higher [on a delivered basis] for March,” he said, “though, it may depend largely on how the tariff situation unfolds, so we’re not completely sure at this point.”
One Midwest scrap supplier said the effect of tariffs could cause a spike in local busheling values, which were $40-50/gt ($41-51/mt) higher delivered to customer than was seen for January. Busheling scrap in the vicinity of Chicago settled at $455-480/gt ($462-488/mt), market insiders told SteelOrbis.
“I’m hearing similar chatter about March scrap being sideways to higher,” he said, “though I’m also hearing we could end up seeing busheling scrap in the $700/gt range ($711/mt) [delivered to customer] come April.”
Based on a sideways to higher expectation for March scrap versus February scrap settles, March busheling scrap in the Ohio Valley could settle at or above $455-480/gt ($462-488/mt) delivered to customer, while shredded scrap could close at or above the $430-435/gt ($436-441/mt) February settle, delivered. March HMS 1 could settle at or above $375-395/gt ($381-401/mt) delivered price, while March P&S is likely at or above the February settle of $421-431/gt ($428-438/mt) on a delivered to customer basis.
On the US East Coast, a sideways to higher early March scrap estimate would put busheling scrap at or above the recent $410-430/gt ($417-437/mt) February settle on a delivered basis, while shredded scrap is seen at or above the February $385-395/gt ($391-401/mt) delivered to customer settle. March HMS1 is seen at or above the February settle at $355-370/gt ($361-376/mt) delivered, while P&S could settle at or above $355-365/gt ($361-371/mt) on a delivered to customer basis.
