Throughout January, many predicted that US domestic scrap prices could drop in the following month, and those predictions appear to have proved accurate. Even though export scrap activity levels were decent throughout January, prices have softened in the last couple weeks, and export yards are now paying about $10/lt less for scrap then they were just a couple weeks ago, prompting expectations that US domestic scrap prices will fall by a similar amount during February buys. While the winter weather conditions in much of the East Coast and Midwest have been difficult the last few weeks, slowing down scrap flow into dealers' yards, that alone may not be enough to prevent prices from dropping in February.
Domestic mill demand for scrap this month is far from strong, according to SteelOrbis sources; and with at least one major Midwest mill taking an outage this month and finished steel prices weak, mills aren't likely to buy more scrap than they immediately need so as not to hold much inventory. As a result, US domestic prices are now anticipated to move sideways to slightly down this month. The market isn't expected to settle completely for about another week or so, but as in January, the East Coast and Southern markets are expected to be stronger than in the Midwest, where scrap is currently more abundant.