A slowdown in US domestic scrap flow coupled with a slight strengthening in the US export market has evoked rumblings that domestic scrap prices may have bottomed in November.
Up until mid-November, scrap dealers and scrap buyers alike were anticipating yet another significant drop in US domestic scrap prices for December--US domestic finished steel demand was lethargic and export scrap prices were still softening. However, in the last week, export scrap prices to the Far East rebounded and are now trending upward, although ex-US scrap prices from the East Coast to Turkey are still being pressured lower. Additionally, under the anticipation that domestic demand for both flat-rolled and long steel products would be slow in the final two months of the year, sources tell SteelOrbis that some mills made minimal scrap purchases in the beginning of November and would therefore need to buy heavier next month.
While a neutral to slightly up trend isn't entirely out of the realm of possibility for scrap prices in December, an increase may be difficult to come by. Activity in the flat rolled sector has been strong the last couple weeks as a result of announced price increases, but flats mills haven't been able to collect the increases in full, and the market remains extremely volatile. Additionally, significant levels of discounted pig iron have arrived into the US so far in November, which some mini-mills are opting to use instead of busheling scrap when possible, according to industry insiders. As for domestic shredded and HMS I scrap prices, an increase may be difficult to attain as well, because Turkish mills continue to buy less expensive European scrap and are pushing for lower prices on export scrap from the US. Furthermore, long steel demand in the US may still be too anemic to warrant a price increase.
In the beginning of November, East Coast busheling scrap prices were about $450 to $460/lt ($443 to $453/mt); shredded scrap prices were about $415-$420/lt ($408-$413/mt); and HMS I prices were $375 to $385/lt ($369 to $379).
In the US Midwest, busheling prices were $450 to $455/lt ($443 to $448/mt); shredded scrap prices were $410 to $420/lt ($404 to $413/mt); and HMS I prices were $380 to $385/lt ($374 to $379/mt).