Scrap prices for the US domestic market trended sideways in June for all grades as scrap demand remains consistent and flows are adequate. Some buyers commented that there is an overabundance of scrap material in the market, but the steel sector’s robust activity has consumed it at a brisk pace. Contacts expect July to feature a similar trend, as part of the two to four months of stability projected in April. Yet there are market fundamentals and possible federal commercial policy implementations that could help prime grades’ prices in the summer months.
In the meantime, #1 busheling settled at $450-470/gt delivered consumer in the Midwest, with Chicago remaining at $450/gt delivered, while in Detroit, mills were seen purchasing the grade in the $460-465/gt delivered range. Higher values for the grade were seen as well in Pittsburgh at $465/gt delivered and in Cleveland at $470/gt delivered. In the US East Coast (USEC), particularly in the domestic Philadelphia market, the grade remained flat at $450/gt delivered.
Participants noted that most, some said all, of the available prime grades in the US were purchased in June, which could lead to limited supplies in July. Moreover, demand remains robust across the country. The installed capacity utilization rate has strung six weeks in a row above 80 percent (81.3 percent for last week), according to the American Iron and Steel Institute (AISI). The rate has not dropped from 79 percent in ten weeks. The price of hot-rolled coil (HRC) in the Midwest continues to grow, reaching this week $1,106.7/nt from $1,068/nt one month ago.
During Steel Dynamics Inc.’s (SDI) Q1 call, Mark Millet, chief executive officer (CEO), mentioned that market fundamentals are in place for a robust steel consumption rate in the US, not only for the rest of 2026 but for years to come. He mentioned that order entry activity and higher prices continue to improve. Participants in the sector, in general, have mentioned that the 25 percent import tariffs the US imposed in March of last year have prevented high amounts of Asian finished steel from entering the domestic market. Executives in the sector, like Millet, have mentioned that the country’s manufacturing activity has recently expanded, providing additional opportunities for the steel sector. According to the US Bureau of Labor Statistics, total output from the country’s manufacturing sector increased annually by 3.3 percent in Q1.
The Institute for Supply Management (ISM) reported a purchasing management index (PMI) for the manufacturing sector in May at 54 percent, indicating growth. The PMI for May is the highest since May 2022. ISM reported that the economy grew for the 19th month in a row. It also mentioned in its latest report that steel prices grew and that steel products remain in short supply.
A recent development could help bolster prices for prime grades even more. The US Trade Representative left Brazilian pig iron out of the list of exclusions that avoid an import tariff into the US, possibly setting up a 25 percent duty for that material. As of Thursday, negotiations are ongoing between Brazilian officials, US authorities, and US manufacturers to determine if the duties could be removed. If a compromise is not reached, US mills that depend on Brazilian pig iron could turn to prime grades instead, lifting the price very soon.
Balance in cut grades
Cut grades remained sideways everywhere in June as well. In Houston, the price of HMS I remained unchanged at $350/gt delivered consumer, and P&S 5ft was also flat at $360/gt delivered. In Detroit, the price of HMS I was sideways in June, settling at $375/gt delivered, while P&S 5ft settled at $400/gt delivered.
The export market, on both coasts, has been exerting downward pressure on cuts. Prices to USWC docks have decreased by $25/gt in the past few weeks, while in the USEC, they have also been softening lately. At the same time, the hot Summer weather could curtail scrap generation in some regions, particularly in the South.
