Sources tell SteelOrbis that expectations for a US domestic scrap price increase in March have sustained, although the amount of the increase will depend largely on outside factors such as scrap collection. Massive, severe winter storms in the US Midwest and South have left millions of homes and businesses without power, and sources say there is already a significant impact on scrap collection that could drive scrap prices higher by the time the market settles next month.
In addition to supply constraints, higher export scrap deals are also expected to bolster higher US domestic scrap prices. Today, SteelOrbis reported a deal for 25,000 mt of HMS I/II 80:20 scrap at $418/mt CFR, while a week ago prices were reported at $410/mt CFR.
As for an expected increase amount for US domestic scrap in March, sources are currently eyeing a $20-$30/gt increase in shredded and cut grades, as “mills are running well and inbound flows to the scrap yards in the North and Northeast are at a snail’s pace.” However, in the Texas region specifically, where many scrap yards are currently closed due to the weather, scrap prices could move up by $30-$40/gt.
One source mentioned that prime grades might hold at current levels, although flat steel mills may not resist an increase, considering demand for flats has remained strong and prices are still “bafflingly high.”