US scrap prices may have jumped up sharply this month, but sources close to SteelOrbis are mixed on their views for April. In the early part of the week, some sources said they believed the market could trend at sideways to “plus $10 or $20,” but this week’s correction in both iron ore and export scrap prices has dampened that sentiment.
On Tuesday, SteelOrbis reported that prices for import iron ore in China plunged sharply, and that the Turkish import scrap market had signaled a slight decrease in prices. However, despite big declines seen in iron ore prices in the first part of the week, iron ore prices have started to rebound.
“The rationale for the strong sideways pricing was linked to a couple of things, such as still-strong demand for finished steel and increased activity out of the construction sector,” a source said. “But after what happened with iron ore prices in the early part of the week, a lot of people are taking more of a wait-and-see approach before they make any predictions about April.”
Others have said that in the current week, the market trend feels unpredictable.
“We just sold March, so I am in the ‘it’s way too early to predict April’ camp. A lot can change in 3 weeks,” another source added.
“Better weather will bring out more scrap and possibly drive the price down a bit, and I sense that best case for the domestic scrap market in April is sideways,” a third source noted. “If [prices] are down, they probably won’t be down by much. Domestic mills are running very well, and they are expecting to continue with strong order books.”
On Monday, AISI reported that for the week ending March 6, the domestic capacity utilization rate was recorded at 77.4%, compared to 76.2% in the same reporting period last year. Additionally, strong demand out of the flat rolled steel sector, coupled with extended lead times, buyers who say they’re still having a hard time getting steel, and this month’s restart of JSW’s Mingo Junction mill, are all positive signs for the domestic scrap market.
A final source said that while he thinks some scrap prices could soften, “busheling remains in short supply and I think it will be sideways to up in April. Obsolete scrap will likely see a reduction in April. Scrap inflow into the yards is good and I don’t believe that [scrap yards] sold all of their shredded scrap this month. All that being said, the mills continue to raise their prices, so any reduction will be hard to pass through the dealers.”