Similar to last week, SteelOrbis sources are unified in their belief that May scrap prices are likely to decline. Factors contributing to this prediction include still-soft flat rolled steel prices, declining finished steel led times, and still-falling ex-US scrap cargo sales prices into Turkey.
One source polled said he’s pegging the market at down $30/gt across the board.
“I think down $30 is in the bag, and more might be possible if export continues to fall,” he said.
For example, earlier this week, SteelOrbis reported that the most recent ex-US cargo sale into Turkey was transacted at $415/mt CFR, adding that scrap generation in the Iskenderun region of Turkey, which was heavily impacted earlier this year by large-scale earthquakes, is very good. SteelOrbis further reported that Turkish mills in that region are mainly working with domestic scrap and are exerting extra pressure on import scrap prices.
“I know some are pushing for down $50/gt or even $70/gt, but I don’t think that is in the cards in May, but [it] certainly [is possible] over the next 2 trades,” he continued.
Others agreed that the market is sure to soften.
“I believe the mills will try to go down as much as they can,” a second source added, “meaning [trying to by down by] over $50/gt and more like $70/gt. There is no metric which is preventing them [from taking the market down by this much in May.] The dealers are in a poor overall position.”
The May buy cycle is expected to start next week.