On August 14, SteelOrbis reported a general expectation that prices would decrease around $20-25/gt ($20-25/mt) on cut grades such as shredded, P&S, and HMS I scrap while busheling scrap decreased $10/gt ($10/mt), reflecting a repeat of the August settled trend. As Turkish scrap buying prices declined and ex-US deals in Turkey were quiet, East coast and Midwest scrap sellers begin to brace for a potential further downturn on overhang scrap inventories in general plus the higher potential for export scrap at the docks being offered inland.
Over the past week, prices in the global markets began to show signs of strength with Turkish mills returning to the import market at firm numbers, including a recent ex-US deal at $320/mt CFR on HMS I/II 80:20 and an ex-Canada deal for premium grade scrap selections at $327/mt CFR.
While the higher global prices were acknowledged as good news by sources, the reality of the lower export quantities from the US, despite recent bulk buys from Turkey and Vietnam, still left US domestic scrap sellers with supply side pressures into September negotiations. Sources inform SteelOrbis that the market has been slow to develop this week and they are unsure of prices settling by Friday, September 7.
A source noted that some mills in his region made offers today on shredded scrap at prices $20-25/gt ($20-25/mt) lower than previous month’s settled prices and $20/gt ($20/mt) lower than the previous month’s settled prices on prime grades such as busheling scrap. A source in Chicago noted that while the “day was still quiet, the hopes are a price erosion of $20-30/gt ($20-30/mt) at most across all grades in September.” He added that lower prices have an effect across finished steel goods price calculations and an impact on feedstock flows and, given all his evaluations, including the high demand by US mills on higher capacity utilization rates, he did not expect for prices to settle dramatically lower than initial expectations. A separate Midwest source added, “Negotiations this month look like an argument of plus or minus $5/gt ($5/mt) from the $20-25/gt ($20-25/mt) basis for the most part.”
Settled prices in the Midwest and East coast were reported by SteelOrbis in early August.