June scrap prices may have settled up sharply, but most sources close to SteelOrbis say they believe that July prices are likely to hold steady. That prediction is linked to several factors, including stable dock prices in the Northeast, “decent” scrap flows, and a belief that raising prices won’t bring additional scrap into the yards.
“Scrap has been flowing pretty good at these prices,” an East coast-based source said, adding that one of the exporters “has so much scrap on the ground right now they’re running out of space. The exporters are still getting a great flow. Everyone is.”
Another source agreed. “Prices are really good right now,” he said. “Everyone is making money and if the market comes in at sideways, I don’t think a lot of the guys who are selling will care.”
Looking to the Ohio Valley, most sources within that region also believe that prices will stay sideways, although all sources polled say that logistics are still terrible.
“Everyone is truck captive, and the big problem is that people can’t get their hands on trucks or rail cars, and that’s having an impact not just on the scrap market, it’s impacting everything,” the source added.
Scrap inflows within this region are also described as good, and while most sources polled say they don’t see a downside for next month, they don’t see an upside either.
“I have talked to a couple of people who are calling for a $30/gt, $40/gt, or even $50/gt increase next month [based on what’s been going on with finished steel prices], but I just don’t see it,” the source said.
A final source said that while he’s heard the same type of chatter, he doesn’t see prices shooting upward. “Guys might be pushing for higher prices due to limited transportation options and higher transportation costs, and that could be eating into their margins, but besides that, I just don’t see scrap going up next month,” he said. “But then again, what happens next month all remains to be seen.”