The situation in the US domestic scrap market is largely on par with what we reported a week ago: most sources believe that busheling will trade at down $20-$30/gt ($20-$30/mt) due to renewed availability. Sources also note that a lot of people have their “fingers crossed” for sideways pricing on HMS, shredded and P&S scrap.
“If the mills try to take [HMS, shredded and P&S prices] down, the margins just aren’t there,” a source said. “Do I really want to sell and lose money? No. If I were in charge, and if it were my money, and the mills offered down $10-$20/gt, I’d pass.”
On the other hand, finished steel demand in the US is still lagging, sources note, adding that while mills have been bringing back capacity “at a snail’s pace,” steel supply seems to be outpacing demand. “Would I be surprised if mills tried to take prices down? No. Do I think they’ll be successful if they do? Also no.”
Multiple other sources agreed, noting that export activity off the East coast is “fairly healthy.”
“With everything that’s going on with export, if the mills try to take prices down, I think you’ll see a lot of yards selling to the docks. Not to mention that the docks pay faster.”
It’s also been rumored that while East coast docks have not “officially” raised their prices, that some deals are taking place at slightly higher price points than what’s “officially” being offered.
However, market sources have reported knowledge of one seller who has already sold shredded scrap to mills “at prices below July levels.” It’s not immediately clear whether this transaction will be an outlier or if it’s an early indicator of what may happen during next month’s’ buy cycle.
August settled prices will be available next week.