Numerous sources close to SteelOrbis say they believe that the US scrap market is expected to trend upward in January.
"I think the January market will be up $20-$30, especially with the latest export numbers from SIMS,” an East coast source said on Wednesday afternoon, referencing an ex-US deal that was transacted earlier in the week.
On December 10, SteelOrbis reported that a Turkish mill purchased a cargo consisting of 33,000 mt of HMS I/II 80:20 scrap at $295/mt CFR, 5,000 mt of shredded scrap at $300/mt CFR, and 2,000 mt of bonus grade scrap at $305/mt CFR, for early January shipment. The HMS I/II 80:20 scrap price in this deal was $23/mt higher than the price in the previous contract reported on November 29.
“Export [prices] are up substantially from their low which is certainly going to play a role in how things trend in January,” the source continued. “The domestic market in November was up $20-$30/gt ($20-$30/mt) December was up by about $30/gt ($30/mt) and as high as $40 ($41/mt) in some places. It seems demand is still there, and I think there are some mills that were forced by their accounting departments to be a bit more restrained than they would have liked to be, because the accounting departments wanted to monitor year-end levels. Dealer inventories are down. So yes, our expectation is that the market will be up $20-$30/gt ($20-$30/mt) and we need to keep an eye on export.”
Export pricing has continued to rise since earlier in the week. Today, SteelOrbis reported that a Turkish mill booked another ex-US cargo consisting of 30,000 mt HMS I/II 80:20 at $297/mt CFR, 8,000 mt of shredded at $302/mt CFR and 2,000 mt of bonus grade at $307/mt CFR, for January shipment.
Another source agreed with an up $20-$30/gt ($20-$30/mt) market in January.
“I think up $20-$30 could be the number,” he added. “The weather hasn't been terrible, and we haven't seen much of an impact with logistics. I think the market will be dictated by simple supply and demand models and I think that's pretty balanced at this point. I think we'll have an up market. Things are good still, but I don't think things will be crazy.”