Market
June 18, 2024
Ferrous market update: Quiet currents and mixed signals
Written by Stephen Miller
The U.S. scrap market is quiet as we pass through June.
The speculation about the direction for July is, again, with mixed sentiments, most of which are neutral to bearish. The concerns are about demand during the summer months. There are still several planned outages and other cutbacks at various mills that can limit overall demand for recycled steel scrap. Some scrap processing facilities are reporting a slower flow of obsolete scrap into their yards. However, given the lack of demand, especially in the Great Lakes region, the lack of supply should not cause any bullish reaction in the market.
RMU reached out to a scrap processor in the Midwest to see how they view the state of things. He said inbound shredded feed was off marginally, but scrap yard inventories are very low. He said after they shipped a multiple carload order of shredded scrap, they had just “a half of carload on the ground.” This is a bit unusual, but it points to the fact flows are decreasing.
The sentiment views are that, over the summer, the scrap market should trade basically sideways with possibly some weakness, that is until demand at the mills improves. This should go on until the end of the summer when the mills will come back to the market all at the same time and prices will be driven up. This has happened many times before.
On the export front, the decline of scrap prices in North America has not yet affected export prices off the East Coast. In fact, the prices have risen into the mid-$380’s on recent sales to Turkey after the June downward settlements. Prices in the EU have also advanced during this period. Usually, when our domestic prices fall to the extent they did in June, export prices follow. This has not happened thus far.