The US domestic scrap market is getting tighter due to low scrap supplies in combination with rising demand. As a result, US busheling scrap prices have been pushed up by approximately $25/long ton ($24.60/mt) since last month, while shredded scrap and HMS I prices have gone up by $10 to $20/lt ($9.84 to $19.68/mt) depending on region.As domestic steel mills are starting to receive more orders and
scrap demand for the export market is fairly strong, the US domestic
scrap market has been strengthening. Domestic mills bought a good amount of
scrap tonnage in July, causing prices to rise sharply. In mid-July, some market insiders expected that domestic
scrap prices might stay flat in August, though demand has proved strong enough to keep the upward price momentum going for another month.
Many
scrap dealers have already sold a big portion of their
scrap inventories in July, which caused supplies to tighten further. In the meantime,
automotive production has picked up as well. Several integrated mills, such as
ArcelorMittal Chicago and
US Steel's Great Lakes Works, are going to restart their operations soon, so it is expected that more
scrap purchasing from these and other integrated players will be seen in the coming weeks, as integrated steelmakers seek to increase their
scrap consumption to keep up with the strengthening demand for flat rolled. Therefore, with the healthy export
scrap demand and prices, up-tick in domestic mills’
scrap purchases, and a very limited
scrap supply, US
scrap prices have gone up in August.
When compared to the early July prices, busheling
scrap prices have gone up by approximately $25/lt, while shredded
scrap and HMS I prices have raised by $10 to $20 /lt depending on regions. Currently, on the East Coast, US domestic busheling prices are in the range of $315 to $325 /lt ($310 to $320/mt), shredded
scrap prices are between $270 to $280 /lt ($266 to $276/mt); and HMS I prices are at a level of $240 to $250 /lt ($236 to $246/mt). In September, market sources expect that the US
scrap market will keep tightening and domestic
scrap prices may go up another $10 to $20/lt.