US scrap markets for June are now seen sideways to $10-$20/nt ($11-$22/mt) lower compared with May scrap settles, as slack domestic steel demand continues, even as monthly steel scrap imports into the US from the world showed a monthly decline, industry data shows.
This week’s June buy cycle market call differs from this past week when the expectation for June was for prices to settle sideways to May, market insiders told SteelOrbis.
“Overall, US Midwest (spot market) scrap is flat to down from prices seen in early May,” a scrap trader told SteelOrbis. “We’re seeing slack (steel) demand and very plentiful supply,” he continued, “For June, the outlook we’re now hearing is that people are leaning sideways to lower.”
Insiders say that the combination of continued scant domestic US steel demand and flat to lower US finished steel prices are making the movement of imported scrap from the world oftentimes noncompetitive.
According to the International Trade Administration, imports of steel scrap into the US from the world at the end of March 2024, (the nearest month for which data was currently available), was down 8.3% to 1,204,671 mt from 1,314,121 mt at the end of the equivalent month in 2023. To be fair, yearly comparisons were better, with end-2023 scrap imports posting at 5,125,399 mt, 7.84% higher than end-2022 4,753,548 mt levels.
While the year-on-year scrap import comparisons were up, market insiders caution yearly comparison data was recorded at a time when US steel prices were considerably higher and the movement of international scrap shipments more competitive on a delivered price basis.
The move from a flat-to-May to a sideways -to-lower June scrap call also comes despite the first weekly price increase from steel producer Nucor since the beginning of April. The steel maker increased its Consumer Spot Price (CSP) for hot-rolled coils from $760/nt ($838/mt) to $770/nt ($849/mt), a 1.3% weekly increase.
Because the price increase comes at a time when spot market HRC price levels continue flat to down, SteelOrbis market insiders caution the move likely was an attempt by the steel maker to establish a price floor to prevent further HRC price declines. “The lower scrap values that we’re seeing doesn’t bode well for the price increase at Nucor,” a contact told SteelOrbis following Monday’s CSP price increase. “The market overall is still flat with most prices unchanged to down.”
With lower scrap values largely determining the value of finished steel, SteelOrbis market contacts expect little in the way of substantial price increases in the near future. US Domestic containerized shredded scrap declined $10/nt ($11/mt) this week to $390/nt ($430/mt), market insiders told SteelOrbis, while other grades were largely flat to week-earlier levels.