Scrap prices in the Ohio Valley have finally settled, sources note, with some speculating that busheling scrap prices could be in for a sharp correction in July.
“The spread between shredded and busheling is still at $200/gt and if you look at historical average, that spread is way too big,” a source said. “On one hand, you could argue that maybe the mills want to keep busheling prices higher as a means of keeping [hot rolled coil] prices propped up, but even with HRC prices coming down, the spread between busheling and [hot rolled coil] still gives mills plenty of margin.”
It's also believed that the main reason that busheling prices were only down by $50/gt in the Ohio Valley, as opposed to down by $75/gt as seen in the Southeast and in Chicago, is that two area mills, Delta and North Star came out at down $50/gt, before Steel Dynamics Inc. (SDI) and DJJ came out at down $75/gt.
“I don’t think anyone would be surprised if [Ohio Valley] busheling prices come down again in July,” one scrap yard source said.
Others agreed.
“I think the bush/shred spread is going to certainly shrink,” a second source added. “Detroit, Ohio, Pittsburgh [prices] only going down $50/gt alongside shred was a surprise. I think busheling is adequately supplied right now but shred is certainly tighter. The reduced prices should slow down feedstock as well. With bush down $75 in Chicago and in the South, we started to see that spread shrink this month and I think it has to continue into July.”
June Ohio Valley settled prices are listed in the chart below.
| Ohio Valley | June | May | Change |
| Delivered to customer | |||
| HMS I | $401/mt | $452/mt | down $51/mt |
| $395/gt | $445/gt | down $50/gt | |
| Shredded | $478/mt | $528/mt | down $50/mt |
| $470/gt | $520/gt | down $50/gt | |
| P&S | $427-$432/mt | $483/mt | down $51-$56/mt |
| $420-$425/gt | $475/gt | down $50/gt | |
| Busheling | $681/mt | $732/mt | down $51/gt |
| $670/gt | $720/gt | down $50/gt |