This week’s exclusive SteelOrbis weekly survey of US scrap market participants finds a mixed call for the likely price direction for March scrap, with suppliers calling the market steady to potentially up depending on weather and February inflows, while mill scrap buyers see the market steady to potentially lower as expectations for warmer weather, they say, could improve the ongoing scant supply situation.
At this early juncture in March scrap discussions, SteelOrbis calls the market most likely sideways, though subject to change depending on the perception of supply on hand at mills and suppliers as buy-cycle negotiations commence in early March.
Following on February’s $20-30/gt scrap price increase for markets east of the US Mississippi River, suppliers told SteelOrbis inventory on hand still remains limited owing to reduced inflows as a result of recent extreme cold weather, which caused vehicle, transport and equipment issues across more than 30 states. Available scrap at mills, they say, may have been allowed to get too low and recent weather was not helpful in building inventory levels.
“There’s been lots of talk in the markets about sideways scrap for March,” said one US Midwest scrap insider. “Inflows into supply yards remain slow, but they are reported to be improving a bit.”
One Midwest scrap broker told SteelOrbis prime scrap, especially, could continue higher for March.
“I think we may see primes tick up a bit, while cut grades (P&S and HMS) may remains flat.”
Mill buyers, on the other hand, said warmer weather should improve scrap inflows.
“I’d say sideways to down,” reported one Midwest mill scrap buyer. “Warmer weather will help us all.”
“We see next month flat to lower, because of much better weather in March” reported another US South scrap buyer.
According to short-term forecasts from the US National Weather Service (NWS), temperatures across most of the Eastern US are expected to moderate from recent below-normal levels. A shift from extreme cold to a warmer trend, featuring active weather, including rain and snow showers is possible in the South and Mid-Atlantic states. NWS short-term forecasts for the Midwestern US calls for high winds as well as the potential for heavy snow across the upper Midwest and Northern Plains.
Based on a current conservative sideways call for March scrap, US Ohio Valley prime bushing scrap could settle near its $30/gt higher February settlement at $445-452/gt ($452-462/mt), while March shredded material could finish near its $30/gt higher February finish near $445-450/gt ($452-456/mt). In the cut grades, a sideways expectation for P&S scrap near $421-431/gt ($427-437/mt) is likely, following its $20/gt February gain. March HMS, which also rose $20/gt this month, was likely to settle near $385-405/gt ($390-410/mt), scrap insiders told SteelOrbis.
In the US Northeast, a current sideways March expectation could yield busheling scrap near $400-420/gt, ($406-426/mt), following its $30/gt February gains. Shredded scrap, which also rose $30/gt, could finish near $395-405/gt ($400-410/mt), while P&S and HMS grades -which both saw $20/gt February price increases- could finish near $350-360/gt ($355-365/mt), and $365-380/gt ($370-385/mt), respectively.