As of late Tuesday afternoon, scrap market sources from throughout the US were perplexed that domestic mills had not yet announced scrap pricing levels for June.
Sources also said that while many initially believed that prices would come down $20-$30/gt during this month’s buy cycle, mills’ relative silence had them thinking that “the market was getting weaker by the hour.”
“It’s been quiet,” a source noted on Wednesday morning, adding that he believed that June pricing would be largely regional.
“I think what we’ll see, is that mills in Detroit / Pittsburgh will try to take prices down to match what’s going on with export,” a source said.
A second source said that as of Wednesday morning, he’d heard rumblings that at least one mill was “toying with down $40-$50/gt,” while a third said he heard rumors that this same mill would come out at down $60/gt for bush and frag and down $50/gt on HMS and P&S.
The latter is where they ultimately announced. As of midday Wednesday, North Star made it official.
“I thought the trade was going to get pushed until tomorrow but this pricing really feels like a shot across the bow,” another source said, adding that he’s already heard that another major mill is likely to announce at down $50/gt across the board.
All sources polled said they felt that down $50/gt+ was aggressive. “This could get messy,” another source added.
An hour later, sources began to cite reports out of the South that offers in that region had started to trickle in down $50/gt, “take it or leave it.” However, sources in that region say they believe that there will be “significant pushback” and that sellers are likely to try to hold the line at down $20-$30/gt.
“June will be a tough month for scrap dealers,” a final Midwest-based source said, citing falling HRC prices and short finished steel lead times as being among the most important drivers of this month’s down trending scrap prices. “Inbound flow to scrap dealers will then be the tale-tale sign of the next move in the market going forward.”
Additional information is expected to be available tomorrow. June settled prices may be available by the end of the week.