US domestic scrap prices settle, some downward pressure at end

Sources inform SteelOrbis that the July scrap buy-cycle has settled as of July 6. Initial expectations for July trading were a sideways trend for cut grades such as HMS I, shredded, and P&S while prime grades such as busheling scrap were expected to achieve a positive move of $10-20/gt ($10-20/mt), compared to the previous month’s prices.

Sources inform SteelOrbis that prices settled as expected, sideways on cut grades and up $10/gt ($10/mt) on busheling. A large scrap trader in Pennsylvania noted that “the market had enough consensus on market direction for the different grades that deals settled rapidly.” The rapid negotiations were also viewed as a testament that mills remain concerned with delivery schedules in a period of high capacity utilization.

A second scrap dealer in Ohio stated, “Fortunately, deal volumes were heavier early in the weak allowing for prices to settle as expected since later in the week a large national scrap dealer tried to undersell shredded by $10/gt ($10/mt) from previous high.” As of July 6, sources report the national scrap dealer offering shredded scrap at $375/mt delivered to customer in Ohio, for example. A third Midwest source said, “The last minute lower price on shredded may be a slight foreshadowing of downward pressure in August, but in percentage points it is a minimal correction and the lower price may not remain negotiable past a week.”

Sources in the Midwest around the Mississippi River region have also reported hearing of shredded scrap offers from the same national scrap dealer by up to $10/gt ($10/mt) lower than the prevailing prices in the region(s). A source attributed the slightly lower prices to recent higher prices in the Southeastern states, compared to central and northern Midwest, and likely large amounts of imported shredded and prime cargoes affecting supply. A source noted, “$10/gt ($10/mt) is within the margin of error. No drastic pricing downturns are expected in US scrap.”

* 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.