The substantial increase in US domestic scrap prices during early July trading came as a surprise to some, and that strength has since faded. The scrap market has been quiet since July prices settled up $15-$25/lt on HMS I and shredded scrap in the Midwest and $30-$40/lt on busheling. On the East Coast, the $20-$25/lt increase in domestic prices came as a surprise to dealers in the area that are now expressing pessimism about August pricing. In August, two major scrap-consuming mills have planned shutdowns--one for nine days and another for two weeks. Additionally, sources tell SteelOrbis that there is still some scrap that didn't get sold for July, which could result in too much availability for the amount of demand next month. As a result, some are predicting that scrap prices could go sideways to down next month.
However, there is still some optimism from Midwest dealers, who report steady and even robust demand from customers in Indiana and Ohio, and contend that a sideways to up move is also a possibility, pointing to strength in the export market. Turkey was actively purchasing US scrap cargos throughout the first half of June, driving export prices up to about $365/mt for HMS I/II about a week ago. Additionally, following weeks of near silence, export scrap activity on the US West Coast is showing signs of life again, and a recent container scrap cargo to Taiwan was sold at prices up $10/mt from a month ago. But these positive indicators may not be enough to stave off some softening in domestic August scrap prices if demand from mills isn't strong enough.