US domestic scrap market quiets ahead of September buys

Following a spike in US domestic scrap prices in early August, there has been little activity mid-month, although the trend for September is pointing upward. In the US Midwest, scrap prices surged $70-$80/lt across the board in early August, with some southern mills paying prices that reflected an increase of as much as $100/lt from July. Even as finished steel demand is largely only lukewarm in the US, steel production levels remain high and many mills are anticipated to at least purchase some scrap in the beginning of September. However, with activity extremely quiet at the moment, scrap dealers are having a hard time determining how much prices will rise next month--but the general sentiment still points to another increase next month. SteelOrbis sources predicted that the market is unlikely to settle until after the Labor Day holiday as mills are expected to delay placing orders until after the three-day holiday weekend.

On the US East Coast, there is a stronger upward trend. US domestic scrap prices in the East for shredded, HMS I and busheling are below market, according to one Northeast scrap dealer, after prices in August only increased $30-$60/lt. In particular, prices for shredded and HMS I scrap are expected to achieve the most notable increase considering stable export scrap activity and higher export prices to Turkey. Offers from the US East Coast to Turkey increased about $20/mt from late July to mid-August, and exporters are slowly attempting to increase prices further.

US domestic scrap prices in early August were as follows: