US domestic scrap prices for the month of October are now seen settling lower across all scrap grades as a result of continued low demand from US domestic mills as units will likely remain shuttered for annual maintenance operations through November, scrap market insiders told SteelOrbis this week.
As October buy-cycle negotiations began in earnest this week, most survey respondents were certain that lower settled prices for prime and shredded scrap were likely as supplier inventories on the ground were reported adequate, and domestic mills appeared less apt to chase sideways pricing offers from suppliers as units remained shuttered for maintenance. At midweek, insiders reported to SteelOrbis that cut grades like P&S and HMS were also starting to trend at least $10-20/gt lower on a delivered basis.
“With the exception of Detroit, we would not be surprised to see the P&S (scrap) price drop by $20/gt,” remarked one Midwest scrap insider prior to settlement. “We expect HMS to settle $10 lower, shred to move down by $10/gt and primes to settle off by $20/gt as demand just isn’t there from the mills this month.”
Earlier this week, insider told SteelOrbis that prime scrap could settle $20-30/gt less, shreds $10-20/gt lower, while cuts were seen sideways to September settlements on a delivered to customer basis. Some insiders said that improved export demand for November scrap shipments this week overseas may have improved the October domestic scrap pricing outlook, limiting monthly declines and offering protection for US mills against lower production margins. Most obsolete grades were expected to settle $10-15/gt less at press time.
“Scrap export demand from Turkey, Egypt and Asia has strengthened, providing a global floor for US scrap,” remarked one US Gulf Coast long steel insider. “As a result, domestic scrap prices for October are expected to decline $10-20/gt, offering cost relief to US mills and improving production margins without downward pressure on rebar.”
“Pittsburgh is off $10/gt on shred and $20/gt on primes,” said one Gulf Coast scrap insider commenting on today’s (Oct. 9) settles.
Based on an average $20/gt decline expectation for delivered US Midwest prime busheling scrap in the US Ohio Valley, October busheling scrap is likely to settle at $395-420/gt, ($401-427/mt), while shredded scrap is seen settling near $365-370/gt ($371-376/mt). Ohio Valley P&S and HMS grades are last seen down $10-15/gt to September settles at $351-361/gt ($357-367/mt) and $315-335/gt ($320-340/mt), respectively, scrap insiders told SteelOrbis.
In the US Northeast, an overall lower October scrap settle could see prime busheling grade material traded on average $20/gt less on a delivered basis at $340-360/gt ($345-366/mt). Shredded grades are seen on average last $10/gt less at $315-325/gt ($320-330/mt), while obsolete grade HMS I/II is likely to settle $10/gt less than September at $295-310/gt ($300-315/mt), while P&S grade is seen $15/gt lower at $280-290/gt ($284-295/mt) delivered to mill, respectively, scrap insiders told SteelOrbis.