This week’s exclusive SteelOrbis survey of US scrap market participants finds most now see March scrap pricing sideways to lower following a mixed call one week earlier as markets still felt the effects of earlier extreme cold and snowy weather that interrupted scrap inflows across much of the US, market insiders told SteelOrbis.
Following last week’s mixed call amid continued industry concerns about scrap inflows and potential nearer-term weather-related issues, this week’s call is dominated by new talk of moderating weather which was likely to improve scrap inflows into supply yards ahead of March scrap negotiations.
“We’re hearing a continued sentiment of sideways to down for March,” said one Midwest scrap broker. “We could very well see (February price increases) given back in March. Mills will push for that, though dealers will seek sideways pricing as its their best-case scenario.”
Another US Midwest mill scrap buyer echoed new sentiments calling for a potential lower price scenario.
“I don’t see prices for March scrap up at all,” he said. “The March scrap market is now trending sideways,” said another US Gulf Coast scrap insider.
Following on February’s $20-30/gt scrap price increase for markets east of the US Mississippi River, suppliers told SteelOrbis inventory on hand remained 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 told SteelOrbis, may have been allowed to get too low and weather was not helpful in building inventory.
Based on a current sideways to lower call for March scrap, US Ohio Valley prime bushing scrap could settle near or below its $30/gt higher February settlement at $445-452/gt ($452-462/mt), while March shredded material could finish near to lower than its $30/gt higher February finish at $445-450/gt ($452-456/mt). In the cut grades, a sideways to potentially lower 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 at or below $385-405/gt ($390-410/mt), scrap insiders told SteelOrbis.
In the US Northeast, a current sideways to lower March expectation could yield busheling scrap near $420-420/gt, 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.
According to updated 6-10 day forecasts from the US National Weather Service (NWS), temperatures across most of the Eastern and Midwestern US are expected to be normal to above normal during the period, allowing scrap suppliers and mills more time to build depleted inventory levels.
