While the US domestic scrap market appeared poised to weaken slightly in June, prices are now beginning to settle at prices that are sideways to slightly up in some regions. Busheling scrap prices, in particular, showed strength from the start. In Detroit, the first market to settle, busheling prices went sideways while prices for HMS I and shredded scrap fell by about $10/lt. As other cities, including Chicago and those in the East Coast, began to negotiate, it became evident that demand for busheling is stronger this month than it has been recently, and prices for prime scrap grades could even settle slightly higher in comparison to May.
As predicted in our late-May scrap report, while mills were expected to try and push scrap prices down this month, if the mills were unable to secure their requirements, it would force a backlash from dealers and prices would reverse course. Still, in some cities, obsolete scrap grades could settle at sideways to slightly down, with a sideways to slightly up trend in some regions. As of mid-day Friday, prices were still settling, but gaining strength with every transaction. The stronger domestic market comes despite minimal US export scrap activity. While a couple cargos were sold to Turkey this past week following no sales in the final week of May, prices remain low and Turkish mills have not been keen on paying higher prices.