All grades have been trending sideways in a limited number of early deals seen so far in the Midwestern, Southeastern, and Western regions. Some of the traders involved conceded that the trading was preliminary as some mills look eager to secure tonnages, yet the sellers involved acknowledged that a conclusive trend for the June trading cycle is not yet determined.
Other buyers reported that they would make announcements soon, as sellers comment that they believe there will be efforts to bring some grades down before the trade cycle is over. Generous volumes for secondary grades have kept participants talking about potential price contractions for those grades, in particular for cut grades along the US East Coast (USEC) where the export market has softened in recent weeks.
On the other hand, prime grades look the most likely to remain stable; some contacts have even ventured that they could receive a slight price bump after trading is settled. All available #1 busheling is expected to be purchased in this month’s cycle (possibly prompting an uptick in July due to tightness). As of Thursday afternoon, there have been no order cancellations for scrap, which could mean mills are not expecting lower prices in the next few days.
Negotiations are ongoing and are expected to continue into next week. Price movements, if any, are expected to be conclusive by the end of next week.
As for July, contacts believe that if the current positive trend for the market fundamentals continues (including growing hot-rolled coil prices and pig iron prices) there could be an increase in some grades as long as the export market improves. If not, some believe July will be a repeat of June, just more stability (some contacts had reported in April that the domestic scrap market would be stable for two to four months).
The US Steel sector’s activity has seen its best moments since August 2024, with all weeks in May surpassing the 80 percent installed capacity utilization rate, according to the American Iron and Steel Institute (AISI).
Softer exports
More bearish sentiment in the export market, both in USEC and in the US West Coast (USWC), has prompted exporters on both coasts to seek to reduce their inbound costs to protect margins. Prices to the USEC docks this week fell by $10/gt with HMS I settling in Philadelphia at $270-280/gt delivered export yard. That is significantly below the $350/gt delivered consumer that exists for the grade in the domestic market. The softness in exports does not instill upward pressure for the moment. Last month, even before this current cycle of price drops in the USEC docks’ market, sellers commented that they would need to see at least a $40/gt increment in docks prices to consider reentering that market.
Yet the export market to Turkey has been sluggish in recent days, too. The price of US-origin HMS I/II 80:20 fell by $5-6/mt yesterday based on a deal conducted last week at $429/mt CFR Turkey for shredded material, placing ex-US HMS I/II 80:20 at $409/mt CFR.
Rebar demand in Turkey is stalled for the moment as local buyers are evaluating market conditions, as reported by SteelOrbis. Due to higher production costs and currency fluctuations, Turkish mills seek increased rebar prices.
