US domestic scrap prices soften in April, but bottom may be near

Scrap prices in the US came down across in the board in April, but some early predictions are indicating there may be little-if-any downward movement next month. Demand from mills for busheling, HMS I and shredded scrap has been weaker so far in April, and sources tell SteelOrbis that prices would have fallen further if more scrap was available--scrap flow into dealers' yards has only been moderate. Although busheling scrap prices fell in both the Midwest and East Coast, drops in the Midwest were more substantial due to more busheling overhang. Additionally, some mills are still working through heavy pig iron inventories, but if steel production rates remain high, pig iron availability will begin to dwindle by next month. In the East Coast, prices fell an average of $10/lt, but some Midwest mills were able to book for as much as down $15/lt from March, although on average, prices dropped by $10/lt.

Going forward, dealers may begin to hold back scrap if prices fall much further, according to sources, indicating that a bottom may be near, if it hasn't already been reached. The same is true for domestic shredded and HMS I scrap, and dealers explained that margins are already being squeezed. Even so, shredded and HMS I prices in the Midwest were down $10/lt from March, and fell $5-$10/lt in the East Coast. No real upward momentum has been evident in the export market for weeks, and the recent mild uptrend in export prices has been largely attributed to increased freight rates.