In a flurry of late activity, US domestic scrap pricing rose for the new month, with most grades noted at least $20/gt higher than September settles, amid strong export demand on the US East Coast following a fairly quick settlement to a three-day port worker strike, and amid improved domestic mill buying activity in the Southeast and Midwest regions as more idled facilities were expected to emerge from maintenance outages this month, bolstering mill demand for scrap, market insiders told SteelOrbis this week.
And even though many mills expected sideways pricing as October discussions began, following lower September settles, insiders said suppliers, facing dwindling inventories as a result of continued low prices paid to collectors, held out for solid October premiums. It appears that suppliers, at least on a regional basis, were successful this go-round, they said.
“The scrap markets were very regional this month,” reported one Midwest scrap insider to SteelOrbis. “The Midwest and Southeast were traded at least $20/gt higher, while the East Coast markets went up from there on solid export demand.”
SteelOrbis export insiders say recent increases in the cost of cheap billet has increased interest in US export scrap, especially following the quick settlement of the recent strike and the resumption of metals trade.
On the US east Coast, HMS#1 pricing was reported nearly $50/gt higher, with insiders reporting October domestic sales to export yards at $350/gt. They added that delivered offers were heard at $395/mt CFR Turkey, though no takers were noted north of earlier trades at $388/mt, where it stands at presstime.
As domestic trading started, initial reports on Oct. 7 circulated that Cleveland Cliffs had purchased cut and shredded grades for October delivery at plus $20/gt on behalf of its Coatsville and Steelton facilities. Following the reports, market activity dulled for a full day, as apparently other regional mills sought to digest the unwelcome news.
“We heard Cleveland was up ($20/gt),” said the Midwest scrap insider. “Down south, ports were shut down by the dockworker strike, plus they’ve had to contend with two hurricanes.”
Another contact reported a different story regarding the strikes’ effect on October scrap.
“I don’t think that the recent strike had much effect on reducing scrap exports,” he said. “Exporters used non-union facilities, while most of the affect was on containers where less scrap is transported.”
Based on market consensus at time of publication on October 10, Midwest busheling scrap is assessed $20/gt higher than September settles at $375-395/gt or $381-401/mt, while shredded grades rose $20/gt to $370-380/gt, or $376-386/mt. HMS#1 rose $20/gt to $340/gt or $345/mt, while P&S was traded an average $20/gt up at $365-375/gt or $371-381/mt.
On the US East Coast, HMS#1 is assessed $48/gt higher than September settles at $350/gt ($386/mt) on solid export demand, while shredded material is reported an average $25/gt higher at $395/gt or $401/mt. $20/gt monthly gains were seen in P&S and busheling grades with P&S settling at $340-366/gt ($345-365/mt), while busheling saw most activity at $370-405/nt ($376-411/mt), market insiders told SteelOrbis.