US Industrial scrap prices shoot up again

Due to very tight supplies and strong demand from the flat rolled sector, busheling scrap prices have risen significantly, by approximately $95 to $105 /long ton (lt), in July, while cut grade scrap prices have also increased by approximately $25 to $40 /lt this month.

Currently, Midwest busheling scrap prices are in the range of $870 to $880 /lt. Shredded scrap is sold for $590 to $600 /lt, while HMS I ranges from $530 to $540 /lt.

Although cut grade scrap prices have rebounded this month, the large price gap between busheling and shredded scrap has not narrowed since last month. On the contrary, the price gap has widened further, by approximately $55 /lt, when compared to June. The price difference between busheling and shredded scrap is currently about $280 /lt.

For the cut grades such as shredded and HMS, scrap demand is strong, mainly from the international market rather than the domestic market, though on the domestic side, the mills keep buying as well. Meanwhile, supplies are diminishing every month and are not being replenished fast enough to meet demand. There are very limited prime grade scrap supplies in the market, as auto plants are cutting back vehicle production, particularly for SUVs, and are in some cases shutting down completely. With prime grade scrap supplies being so low, and busheling scrap and pig iron being so expensive, market sources predict that more scrap buyers will start to utilize shredded and heavy melt scrap, thus driving prices up.

On the export side, Turkish booking has been quiet for the last two weeks, and prices have gone down approximately $10 to 20 /mt from last month. In mid-June, a Turkish mill concluded a booking for a single cargo of scrap ex-US. The cargo was composed of shredded scrap booked at $725.5/mt CIF Marmara.

USITC data show that the top recipients of shredded scrap from the US in April were: South Korea, at 148,000 mt; Taiwan, at 97,000 mt; Malaysia, at 67,000 mt; Japan, at 55,000 mt; as well as Thailand and Indonesia, at 50,000 mt. Mexico, Turkey, China, India and Egypt also imported some tonnage of shredded scrap from the US during the period.

For HMS I grade scrap, the top recipients from the US in April were: Turkey, at 130,000 mt; South Korea, at 91,000 mt; Thailand, at 62,000 mt; Malaysia, at 43,000 mt; and Mexico, at 41,000 mt. Some other countries which imported HMS I grade scrap from the US in April include Taiwan, Egypt, Japan and Canada.

The total amount of ferrous scrap exports from the US in April was 1,270,000 mt, which shows a slight increase of 56,000 mt when compared to the figure of 1,214,000 mt in March.