With strong domestic demand and firm global scrap prices, the US domestic scrap market is pointing towards an upward trend in the January buy-cycle. Initial expectations were of an increase of $10-15/mt in January. While the scrap market is expected to settle next week, as of January 5, mills in the Detroit area and other regions have offered scrap sellers an increase of $20/mt on busheling scrap and $25-30/mt on shredded scrap compared to December settled prices.
While several US scrap dealers reported adequate scrap feedstock into yards through December, the latest severe winter effects in the US Northeast and Midwest, continued strong export demand, and increased domestic demand outlook, are pointing towards a tight scrap supply in the US. This is motivating scrap sellers to resist mill offers along with their desire to capture some of the additional upside as US mills have made substantial price increase announcements on flat steel products throughout the week.
As a gauge, sources inform SteelOrbis that average market pricing on US shredded scrap in the Midwest delivered to mills has increased $30/mt from $295-305/mt to $325-335/mt despite the US scrap market continuing to trade into next week and potentially settling slightly higher. Due to scrap export demand, East coast scrap settled higher in December and at the moment is expected to also increase $20-30/mt in January.