August Ferrous Scrap Prices Expected to Tread Sidways to Up $10

The domestic steel mills are not canceling any remaining open July scrap orders which is an indication that the mills are busy, need the scrap and do not anticipate being able to buy scrap for less money in August than they did in July. SMU scrap sources are telling us demand is good and supply continues to be decent. The combination of both points toward a “strong sideways to up” ferrous scrap market as we head into August scrap pricing negotiations between the domestic mills and the scrap dealers.

A large national scrap company told us, “Generally speaking, the market appears to be quite firm heading into August as mill operating rates and finished steel selling prices continue to improve.” This same source felt scrap prices would be up $10-$15 per gross ton in August. This company also felt negotiations would drag out as there is a “disparity between buyer and seller expectations.”

One of our scrap sources from the East Coast told us, “The August market is looking firmly sideways.  Mills – many of whom are owed a good amount of scrap because of rail service disruptions all over the country – are not canceling orders.  They do not think they will be able to buy the scrap back at less money. and their business is good.  One major flat rolled mill told me yesterday they were booked through September and were beginning to book for October.  

“The spring flows, which started later than had been expected this year – extended later than they usually do as well (into the early part of July).  But those stronger flows have now abated a good bit and we are definitely in the summer doldrums.  

“Export demand is ok.  Prices are stable or rising a little.  They are firm enough to keep scrap that is traditionally exported destined to overseas mills and out of the domestic market.  But export volumes remain well below their historic levels.” 

The expectation from the east coast is trading will commence early next week and we should have a good feel for pricing one week from today. Stay tuned.