US scrap prices have come down by as much as $25/long ton ($24.61/mt) in the beginning of February along with the declining export scrap prices.
With the slow export scrap market and the declining export scrap prices, the earlier anticipation of a slightly up to sideways scrap move in February has shifted. In the beginning of February, US scrap prices came down by approximately $10 to $25/long ton ($9.84 to $24.61/mt), depending on grade and region. When compared to the prices in early January, February busheling scrap prices have dropped by approximately $25/lt ($24.61/mt), shredded scrap prices have come down by approximately $20/lt ($19.68/mt) and HMS I prices have decreased by approximately $10/lt ($9.84/mt). Currently, on the East Coast, busheling scrap prices are in the level of $485 to $495/lt ($477.34 to $487.18/mt), shredded scrap prices are at $450 to $460/lt ($442.89 to $452.74/mt), and HMS I prices are between $435 and $445/lt ($428.13 to $437.97/mt). Some market insiders see the possibility of prices to drop slightly more in the next couple days as export scrap prices are expected to go down further.
However, scrap demand from domestic mills remains decent. Poor weather including severe snowstorms has made transportation difficult and caused shipments to be delayed, and scrap flow is not expected to see an improvement until April. With this factor, increased domestic scrap demand is expected next month. Moreover, export scrap purchasing activity is expected to rise when the Turkish producers resume scrap buying for their production needs and Far East producers return the market after the Chinese New Year holidays later in the month. Therefore, some optimistic market sources foresee an upward domestic scrap pricing trend in March.
Opposite to the US scrap prices, pig iron prices have slightly increased by approximately $5 to $10/mt from two weeks ago. Current pig iron prices are in the level of $550 to $560/mt CFR Nola. Lack of supply continues to allow pig iron prices to hover in the high level.