In mid-July, predictions for the direction of US domestic scrap prices for August were mixed, but a few early sales appear to have set the tone for this month. By August 1, some mills had already purchased shredded at prices that reflect a $10/mt decrease from early July prices. The two deals--Midwest and Ohio Valley--were concluded at $370/lt and $375/lt, respectively. Another mill buyer purchased a significant amount of shredded scrap at prices that were down $15/lt, but was turned down when going back later to purchase more scrap at down $20/lt from July levels. Mills in the East are taking longer to enter the market for August, but sources say that overall, there appears to be shredded scrap overhang (up to 20 to 30 percent more than anticipated in some regions), resulting in more downward pressure on pricing.
In the East, one mill also has a planned outage for two weeks in August and will therefore require less scrap. Flow has been fairly strong throughout July, but could slow in August if shredded and HMS I scrap prices fall more than anticipated. Meanwhile, HMS I scrap prices appear a bit stronger than shredded, and are likely to average a decrease of about $10/lt for August. Busheling is poised to be the strongest in this month, with prices predicted to go sideways amid balanced supply, and demand from flat rolled mills running at high capacity utilization.