US domestic scrap activity for February shows mixed movement potential

Tuesday, 05 February 2019 23:03:12 (GMT+3)   |   San Diego
       

After substantial price decreases in the January scrap buy cycle, initial expectations for February pointed to a possible consecutive downtrend. However, the recent severe winter storms in the US and export activity from Turkish mills has caused sources to change expectations to sideways or even slightly up for February on cut grades such as shredded, P&S, and HMS I. Sources did express concern about possible downward pressure on prime grades such as busheling on oversupply.

As the trading week begins, some Midwest mills moved on bids for scrap at sideways pricing on cut grades and downward pricing on busheling of up to $20/gt ($20/mt) compared to January settled scrap prices. Given the loss of productivity as a result of the severe winter conditions at both the feedstock and shipment management levels, some sellers have informed SteelOrbis of the resistance to accept the lower busheling bids from mills while the sideways offers on cut grades is acceptable for the most part. Sources informed SteelOrbis of hopes to settle busheling at a price erosion of $10-15/gt ($10-15/mt) for most contracts given the continued strong demand for scrap in Q1 and the threat of rising prices in finished steel goods.


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