SteelOrbis sources have confirmed that while there had been “high hopes” that HMS, P&S and shredded scrap would settle sideways during this month’s buy cycle, today’s indicators paint a bleaker picture.
Although scrap prices haven’t settled yet, this is what we can report as of Wednesday afternoon:
- Busheling scrap in the Detroit area is being traded at down $40/gt ($41/mt).
- In the Ohio Valley / Western Pennsylvania, busheling is trading at down $40/gt ($41/mt); HMS, P&S and shredded scrap is trading at down $20/gt ($20/mt).
- A source in Western Pennsylvania reported that there’s “quite a bit of barge traffic,” adding that while HMS / P&S / shredded are trading at down $20/gt, that David Joseph has made offers at down $25-$30/gt ($25-$30/mt).
- In the Southeast, busheling scrap is trading at down $40/gt, whereas “the other grades are trading at down $10/gt ($10/mt).
Scrap dealers throughout the US say they’re keeping close tabs on several things, the first of which is mills’ capacity utilization rate. Earlier this week, it was reported that the current cap rate is hovering at 56.6%.
“Finished steel spot market prices aren’t exactly great right now, and we all have our concerns about mills bringing capacity back online, because the demand [for finished steel] just isn’t there,” a source said.
On the other hand, the market as a whole has taken note of domestic auto sales. In the current week, news outlets are reporting that auto dealerships throughout Pennsylvania have seen a spike new car sales. Similar reports have emerged in the Southwest. Whether this trend will translate into increased steel demand has yet to be known.
Settled scrap prices are expected to emerge by end of business tomorrow.