The week in review: August winds down with lower scrap prices

Let’s get caught up on last week’s news as we head into September.

One question that kept popping up at Steel Summit was concern about the ongoing decline in the U.S. scrap market, particularly as September begins. One key question raised was: why invest in equipment and technological advancements when existing users aren’t providing enough orders? This concern reflects the broader uncertainty in the market as suppliers strive to maintain reliability in the face of declining prices.

Prices on ferrous scrap languished in August. The export market, which had held steady despite drops in domestic tags, deteriorated sharply last month, RMU’s Stephen Miller reported. The prevailing feeling is that prime grades could trade sideways next month and obsolete grades could drop $20/gt.

It’s not unusual to question where we’re headed at this point on the calendar. Just last year, we saw this situation play out. Eventually we saw a prices jump in December. So we will have to wait to see how the rest of 2024 rolls out.

Meanwhile, more countries are imposing trade restrictions. Last week, Canada announced a 25% tariff on imports of Chinese steel and aluminum, along with a 100% tariff on Chinese EVs.

We saw another development in the closely watched deal between Nippon Steel and U.S. Steel. The Japanese steelmaker on Wednesday announced “no less than $1 billion” in additional investments it plans to make in U.S. Steel facilities as part of its pending acquisition. The two companies still anticipate the deal’s closing by the end of this year. Our sister publication, Steel Market Update, has the full story.

Our parent company, CRU Group, reported last week that U.S. smelters said scrap feed is still in good supply, with tolling volumes healthy and open market scrap available, albeit the latter commanding a higher price. Industry sources noted that August has been the first time in a long time that exporters have quoted lower prices, perhaps alluding that the summer retreat in LME lead prices is having some impact on their margins and what they can pay for scrap, CRU said.

Economic highlights

U.S. consumer confidence rose to a six-month high in August. The Conference Board’s gauge of sentiment increased to 103.3 from an upwardly revised 101.9 a month earlier. Consumer spending is the engine of the U.S. economy, which could create more demand for steel-intensive products like vehicles and appliances.

Economic calendar highlights this week: