US East coast domestic scrap prices, which settled at approximately $264/mt ($260/gt) for HMS, $295-$300/mt ($290-$295/gt) for shredded scrap, and $295/mt ($290/gt) for busheling scrap during the May buy-cycle have settled down sharply during the June buy-cycle.
June East Coast Pricing (as of 6/9/2016):
| HMS 80:20 | $183-$190/mt ($180-$187/gt) |
| HMS I | $213/mt ($210/gt) |
| Shredded | $244/mt ($240/gt) |
| Busheling | $254-$264/mt ($250-$260/gt) |
| P&S | $224/mt ($220/gt) |
On June 1, the East coast expectations included HMS at $223-238/mt($220-$235/gt) and shredded at $264-274/mt($260-270/gt). By Friday June 3, we were informed the East coast market was down $41/mt ($40/gt) in general and down $51/mt ($50/gt) for HMS compared to May’s closing numbers.
This month’s sharp price falloff, according to market sources, has been principally influenced by a month-long lag in export activity off the East coast.
Today, however, SteelOrbis has confirmed that Turkish steelmakers have finally reentered the market, with one steelmaker having booked an ex-US cargo of 15,000 mt of HMS I/II 80:20 scrap at $235/mt CFR. This reflects a $95/mt CFR decline from the last US export cargo booking, which was concluded in early-May. The steelmaker also booked 20,000 mt of shredded scrap at $240/mt CFR and 5,000 mt of P&S grade scrap at $245/mt CFR, all for June shipment.
Sources close to SteelOrbis also informed us of a contract cancellation by one of the biggest East coast mills early last week, which greatly reinforced the downward market expectations.
Other Domestic Regions:
On June 1, the predominant consensus for inland domestic pricing was down $20-$30/mt ($20-$30/gt) for obsolete grades and down $10-$20/mt for prime versus May pricing. Prime was not expected to respond as deeply to downward pressure since domestic demand is showing an overall slight increase including from tubular and heavy equipment producers in the area. One trader even expressed belief that in the Ohio/Pennsylvania region, prime may settle very close to sideways due to sufficient demand.
The expectation for the inland domestic pricing held up throughout the week.
According to SteelOrbis sources, as of Thursday afternoon, June prices in the Ohio Valley are down $20/mt on cuts and down $25-$30/mt on shredded while prime is holding sideways. Sources believe that this was an anticipated correction as prime and cut grades were abnormally trading at the same price in previous months, but intuitively, the obsolete lines should be trading about $20/mt less than prime per historical reference. While the bulk of the trading has transpired, SteelOrbis sources report smaller deals are still in the works from mills. According to traders both in the East Coast and Ohio Valley, demand for prime has been solid throughout this trading period and they expect to close some additional deals in the next few days.