With increasing scrap demand in the domestic market and the winter cold weather, US scrap prices are expected to go up again significantly in January.
The current domestic scrap market is strong with increasing demand and limited supply. As domestic mills have low levels of scrap inventories, they are finding it necessary to purchase scrap tonnages in order to continue steel production, building up strong scrap demand in the domestic market. However, the scrap availability is still tight, plus the bad weather has already hit the Midwest and Southeast, making scrap transportation difficult and slowing down scrap flow in these areas. Although scrap flow in the Northeast has not been affected by the bad weather yet, it will also get hit when the snow falls. As a result, it will get harder to acquire scrap tonnages under the bad weather.
Given the abovementioned conditions, it is anticipated that the busheling and shredded scrap prices will go up by approximately $40 to $60/long ton ($39.37 to $59.05/mt), and HMS I prices will increase by approximately $30 to $40/long ton ($29.53 to $39.37/mt) in January, which will bring the East Coast busheling scrap prices to reach around $500/lt ($492.10 mt), shredded scrap prices to the level of around $445/lt ($437.97/mt) and HMS I prices to get to approximately $415/lt ($408.45/mt).
In early December, East Coast busheling scrap prices were in the level of $435 to $445/lt ($428.13 to $437.97/mt), shredded scrap prices were at $395 to $405/lt ($388.76 to $398.60/mt), and HMS I prices were between $380 to $390/lt ($374.00 to $383.84/mt).
The latest USITC data show that the total amount of ferrous scrap exports from the US in October was 1,588,000 mt, reflecting an increase of 272,000 of mt month-over-month and an increase of 459,000 mt for the same period year-over-year.
The main recipients of shredded scrap form the US in October were: China, at 214,000 mt; Turkey, at 147,000 mt; India, at 86,000 mt; South Korea, at 80,000 mt; Thailand, at 62,000 mt; Taiwan, at 51,000 mt; Vietnam, at 47,000 mt; and Mexico, at 44,000 mt. Countries that imported smaller amounts of shredded scrap from the US during the month include: Malaysia, Egypt, and Canada.
For HMS I grade scrap, the top recipients of US exports in October were: Turkey, at 142,000 mt; Taiwan, at 101,000 mt; South Korea, at 86,000 mt; Egypt, at 41,000 mt; Vietnam, at 38,000 mt; and China, at 28,000 mt. Malaysia, India, Canada, and Mexico also imported some tonnages of HMS I grade scrap from the US during the month as well.