Last week, Sources close to SteelOrbis were firm in their belief that May prices would trend downward. That prediction was based on a variety of factors, such as improved scrap inflows, rumors that a large shipment of European origin prime-grade scrap had been shipped to the US, and that fact that pig iron shipments into the US were still “quite healthy,” despite stalled inflow from Russia and Ukraine.
At that time, most sources polled believed that HMS, P&S and shredded scrap would be down by $10-$20/gt next month, and that prime grade scrap would come down by $20/gt+.
This week, however, sentiment has taken a turn. “[Turkish mills] haven’t booked any cargoes out of the US in the past couple of weeks, and it seems like the cheap billet that’s flowing into Turkey out of Russia is placing downward pressure on the market,” a source said.
Earlier today SteelOrbis’ Istanbul office reported that while it’s been rumored that more than 200,000 mt of Russian billet has been shipped to Turkey recently, many sources questioned whether such a large volume could have been traded, “given the risks of working with Russia and the constantly falling prices.”
Lagging scrap bookings from Turkey, still-strong inflows into scrap yards, and improved springtime weather are also impacting the market.
“The [exporters] have been dropping their prices pretty aggressively for the past 10 days,” the source continued. “They dropped their prices by $20/gt last week, they dropped them by another $20/gt this week, and we expect they’ll take pries down again within the next few days.”
Some sellers have confirmed that the scrap yards they work for have also dropped peddler prices by as much as $60/gt in anticipation of next month’s price drop.
“I talked to our guys yesterday and we all seem to think that the market is going to be down somewhere between down $40-$50/gt for HMS, shredded scrap, and P&S,” another source added. “Even after dropping our prices, scrap is still flowing pretty good.”
In terms of May busheling prices, the widespread prediction appears to be in the realm of down $70-$100/gt.
“Primes are definitely too high and they need to get back to some sort of quasi-normal level,” another source said. “I definitely think we’re going to see a huge correction for busheling next month.”
A final source said that while some people he’s talked to “see strength [in the market], but I think there’s a lot of scrap around,” he said. “We’re also moving toward spring and material should become more plentiful.”
The May buy cycle is expected to start in the next 10 days.