US domestic scrap prices take another dive in July

Although prices likely won't fully settle until Monday or Tuesday, the domestic scrap trend for this month is reflecting a substantial decline from early June. Many US domestic mills' scrap buying programs for July were reduced substantially amid low finished steel prices, cooling demand levels and a summer slowdown. Further, sources tell SteelOrbis domestic mills have been relentlessly pushing down scrap prices this month with sellers not pushing back--scrap availability continues to outpace demand, driving prices lower. Export scrap activity in the US over the past week has actually firmed with China coming back into the market to pick up a few cargos considering currently low offer prices. Exporters explained that they were surprised Turkish mills weren't pressuring export prices down from the US given the US domestic price trend, but Turkish mills needed to purchase prompt scrap cargos ahead of the Ramadan holiday.

US shredded scrap has been sold in the Midwest, South, and East Coast at about $330-$340/lt this month, reflecting a drop of approximately $45/lt from June while HMS I scrap was sold for approximately $300-$310/lt--down about $30/lt on the East Coast and $40-$45/lt in the Midwest. Expectedly, busheling prices once again took the biggest hit, dropping below shredded scrap into the range of $320-$330/lt, representing a decline of $50-$60/lt in the Midwest, East Coast and Southern regions. While scrap prices have plummeted an average of about $150/lt since January, the domestic market may not have bottomed out in July. Since mills' scrap buying programs were so limited this month, there may still be too much scrap available for current demand levels come August.