US domestic scrap prices in the Midwest settle higher than expected in June

During the May scrap buy-cycle, scrap prices in the Midwest decreased $10-15/gt ($10-15/mt) on HMS I and shredded scrap, decreased $5-10/gt ($5-10/mt)on P&S scrap, and busheling traded sideways to achieving gains of $5/gt ($5/mt) on some trades, all compared to April settled prices.

With dampened exports to Turkey and the potential of an overhang in inventory in the Midwest as well as the risk of exporters making scrap inventories available inland, expectations for June near the end of May indicated prices on cut grades such as shredded, P&S, and HMS I could receive downward pressure of $10-15/gt ($10-15/mt). Prime grades such as busheling, though, were expected to trade sideways in June.

With the announcement last week of Section 232 tariffs being applied to previously-exempt countries, expectations firmed up and Midwest scrap prices in the June buy-cycle traded mostly sideways for cut grades and increased $10/gt ($10/mt) on prime grades. HMS I decreased $5/gt ($5/mt) from the bottom of the previous range while shredded and P&S traded sideways.

In the Southeast and Texas regions, though, sources report June scrap trading at sideways to an increase of $5/gt ($5/mt) on busheling scrap and sideways up to a decrease of $10/gt ($10/mt) on prices of cut grades such as shredded, P&S, and HMS I. Downward pricing pressure in the South was attributed to the fact that prices in some sub-regions were trending higher than the Midwest for the past several months as well as active scrap import purchases from Mexico through the week.

* Top number denotes change from the bottom of the previous month’s range and bottom number denotes change from the top of the same range in mt terms.