The June buy cycle is unlikely to start until next week, sources note, adding that predictions as to where prices will settle are trending all over the map. Whereas some still believe that cut grades will trend down between $30-$60/gt, with busheling prices possibly trending down at $50/gt+, others believe that cut grades could come down by $60/gt or more.
“The only thing that I know now is that mils are saying they’re going to cut their programs back, and they’re saying they don’t need a lot of scrap,” a source said. “If this happens, that’s going to throw a wrench into things and it could put additional pressure on cuts grades. If you can’t sell because you don’t have orders, maybe you drop your price more to try to get orders. It’s hard to say where any of this is going to land.”
Also of note, is that while some sources believe that busheling prices could come down by as much as $70/gt this month, as the current spread between busheling and shredded scrap price in the Ohio Valley is approximately $200/gt, others predict that trucking and transportion issues, coupled with scaled-back production of busheling scrap, could put that market at down $20/gt.
"Every single person I've talked to in the past 24-hours has different opinions about what's going to happen once this gets started," a final source said. "But I guess we'll all find out who was right and who was wrong at some point next week."