Echoing a market call that began nearly a month ago, the outlook for April scrap remains locked at sideways to lower, though insiders caution the extent of likely price declines next month for US Midwest pricing could depend on how much scrap gets exported during the fast-approaching supply negotiations.
“I think people have largely thrown in the towel for April and conceded that prime scrap will trade sideways, while cut grades could move $10-20/gt lower,” said one US Midwest-based scrap broker. “On the US East Coast, I would keep an eye on export scrap, as some buyers may emerge in trade.”
Even as rising diesel fuel costs for delivered scrap in the US continue because of climbing oil prices, mills surveyed remain convinced April pricing will be down. “April scrap markets are still set to move down,” said one US Midwest-based mill scrap buyer. “I’ve heard down $20/gt from the mill perspective,” said still another US Gulf Coast-based scrap trader. “It mostly looks sideways,” remarked a final US Gulf Coast scrap insider to SteelOrbis.
Based on a sideways to down expectation for April scrap, US Midwest local busheling and shredded scrap grades could settle on a delivered to mill basis at or below $445-455/gt ($452-462/mt), and $445-450/gt ($452-457/mt), respectively. P&S and HMS scrap might settle on a delivered to mill basis $10-20/gt less at $406-416/gt ($412-423/mt) and $370-390/gt ($376-396/mt), respectively.
As the SteelOrbis Weekly Scrap Report went to press (March 26), the price of benchmark spot Brent crude oil stood at about $107 a barrel (/bbl), off slightly from one week prior when prices spiked to over $110 per barrel (/bbl) following tit-for-tat missile and drone attacks on Middle East energy infrastructure assets by both Iran and Israel.
