US scrap prices for the month of September are seen sideways to potentially lower this week in reaction to recent declines reported in flat steel markets, market insiders told SteelOrbis this week.
Market insiders told SteelOrbis that recent capacity additions from the likes of Nucor’s Big River steel mill as well as others in the US Southeast have increased steel output at a time when the growth in domestic steel demand is not keeping pace with increased supply, even though trimmed imports could begin to affect local supply availability. Bearish demand projections from the manufacturing and infrastructure sectors of the US economy are doing little to bolster steel prices, they said, despite an outlook for significant future growth from AI-inspired data centers.
Flat steel pricing for hot rolled coils is reported this week off an additional $5.00/nt at $835/nt ($920/mt), or $41.75/cwt., while pig iron used in US steel production is reported $10/mt lower at $430-450/mt CFR, market insiders said following the last-minute Trump reversal of threatened 50 percent tariffs on Brazilian pig iron.
“The September outlook seems very sideways, still,” said one Midwest-based mill scrap buyer. “There’s not much optimism with steel prices falling, and pig iron prices also already fell.” He added, “Demand is stable, but there’s still excess capacity available at the moment, and [steel] service centers are keeping their inventories low.”
“Two simple words,” said another SteelOrbis scrap insider, when asked about the September outlook following three straight months of steady scrap market pricing. “Not down.”
While lower scrap pricing would indeed buck the recent three months of sideways scrap price trend, some say September could finish down unless demand begins to pick up heading into the 4th quarter. “I’m hearing sideways to soft down possibly,” a New York state-based scrap yard owner told SteelOrbis.
Based on a sideways to down from August, September settlement, US Midwest prime busheling scrap in the Ohio Valley could settle at or below $435-460/gt ($443-468/mt), while shredded scrap might settle at or below $375-380/gt ($381-387/mt). Ohio Valley P&S and HMS grades are seen at or below $361-371/gt ($367-377/mt) and $325-345/gt ($330-387/mt), respectively, scrap insiders told SteelOrbis.
In the US Northeast, a sideways to potentially lower September scrap settle would put prime busheling grade material at or below $380-400/gt ($387-407/mt), while shredded grades could settle at or below $325-335/gt ($330-342/mt). P&S and HMS grades might finish at or below $295-305/gt ($300-310/mt) and 305-320/gt ($310-325/mt), respectively, scrap insiders told SteelOrbis this week.
SteelOrbis historical scrap data shows since monthly domestic scrap prices peaked in March ahead of much anticipated tariff announcements from the US Trump administration, the average price of Midwest Ohio Valley shredded scrap has slumped more than 24 percent from on average $506/gt ($514/mt) to $384/gt ($390/mt). HMS pricing in the US Northeast dropped a more conservative 22.8 percent during the equivalent period to on average $313/gt ($318/mt).