The US domestic scrap market has remained slow in the last two weeks, despite moderate demand and tight supply.
Scrap demand from US domestic mills is still relatively moderate, even though the scrap supply remains tight--particularly shredded scrap. Currently, there has not been significant scrap purchasing activities seen in the market, as domestic mills are not in the hurry to buy scrap, focusing more on managing a comfortable inventory level as it gets closer to the end of the year. However, as domestic mills will need to secure scrap tonnage for the winter, scrap suppliers are continuing to hold onto scrap tonnages to sell in the coming months when prices are expected to see an uptick.
On the other hand, the US export scrap market is slow, with scrap demand from foreign countries lukewarm and ex-US scrap prices not expected to see any significant improvement in the short term. In addition, the uncertainties in the US and global economy and the volatility in the financial market have caused both domestic and international steel buyers to be more conservative in their purchases.
Given the above mentioned factors, market sources expect the US domestic scrap prices will go sideways again in October, and shredded scrap prices may even go down slightly by $5/lt ($4.92/mt) if demand does not improve.
In early September, East Coast busheling scrap prices were in the level of $515-$525/lt ($506.87-$516.71/mt), shredded scrap prices were in the range of $450-$460/lt ($442.89-$452.74/mt), and HMS I prices ranged between $420-$430/lt ($413.37-$423.21/mt).
US Midwest busheling scrap prices were at $510-$520/lt ($502-$512/mt), shredded scrap prices were at $440-$450/lt ($433-$443/mt), and HMS I prices ranged from $415-$425/lt ($408-$418/mt).
As for pig iron, the market remains weak with decreasing prices. Currently, Brazilian pig iron prices are around the level of $515/mt CFR Nola, representing a decrease of approximately $20/mt from two weeks ago. But with the strengthening US dollar, domestic mills are not interested in importing pig iron for the time being.