The COVID-19 virus continues to wreak havoc on global economy, and market players within the US domestic scrap trade say their segment is hardly immune.
“Every time we talk about how bad the coronavirus is for the steel market, it’s way worse than it was the last time we talked about how bad the coronavirus has been for the steel market,” a source said.
Last week, sources throughout the US believed that April scrap prices would likely settle at down $20-$30/gt ($20-$30/mt) from March settled prices. This week, sentiment has worsened. Most sources believe that down $30-$50/gt ($30-$51/mt) is now in the cards.
Part of that is linked to news that dock delivered scrap prices on the East coast have plummeted in the past seven days Yesterday, SteelOrbis reported that dock delivered prices for HMS I/II 80:20 in Philadelphia revised downward sharply, from $195/gt ($198/mt) to an average of $140/gt ($142/mt).
US automakers’ two-week shutdown has also impacted the market, as has news that US Steel plans to permanently idle pipe mills in Lorain, OH and Lone Star, TX.
“The US Steel mills weren’t melting, but they were buying from suppliers who did,” a source noted. “The news that those mills are shutting down will certainly have a knock-off effect.”
Other scrap yard sources have noted they’ve gotten directives “from the higher ups, that they want to see dirt on the ground. They want all of our inventory moved out.”
“They say you can’t sell from an empty basket, but if no one is buying anything it really doesn’t matter how empty your basket it,” another source commented.
Although overall market sentiment is currently bleak, the bright spot on the horizon seems to be the long-talked-about infrastructure plan.
“Elected officials have been talking about this magical infrastructure plan for years, but up until now, no one has been motivated enough to actually get legislation pushed through,” a source said. “I don’t think anyone would be surprised, if, once the coronavirus crisis is put to bed, if the people in Washington finally found a way to get something passed. It would definitely help give the US economy a much-needed shot in the arm.”