US domestic scrap prices settle in Midwest, Ohio Valley for August

Fears of a possible tightening in mills’ scrap inventories, continued summer maintenance schedules and declining export demand all fueled fears of downward pricing pressure on obsolete scrap grades in the Midwest and Ohio Valley days leading up to the August buy cycle.

While mills delayed market entry pending export pricing results, once East Coast pricing was noted as stronger than July, mills increased orders from those that had been initially signaled by buyers.  Therefore, most grades faced a stable volume-demand through the buy cycle.

Shredded scrap pricing encountered slight downward pressure in the Ohio Valley but maintained sideways pricing in the Midwest. The downward pricing pressure on shredded scrap in the Ohio Valley resulted from additional supply competition from East coast scrap yards.

HMS I, on the other hand, encountered approximately a $5/mt ($5/gt) increase in the Ohio Valley while facing a $5/mt ($5/gt) pricing decline in the Midwest.  Sources close to SteelOrbis believe that the price change in HMS I was due to an alignment of spreads between the grades in the respective regions.

Busheling scrap, on the other hand, encountered a $10-20/mt ($10-20/gt) pricing decline due to an increased supply of prime grades into the US market from the UK.  The continued strong demand for busheling scrap, which is used in the production of heavy machinery and value added specialty products,  by Ohio Valley mills kept prices higher in that region despite the additional supply.  

Sources close to SteelOrbis report that inventories at scrap yards are adequate.  Scrap yards will begin efforts at increasing inventory in preparation for the upcoming, traditionally higher volume months of October, November and December.