August Scrap Prices Expected to Slightly Weaken

Written by Brett Linton

Steel Market Update sources expect ferrous scrap prices to weaken further in August, potentially registering the fourth consecutive month of declines since March and April’s record high prices. Obsolete grades are anticipated to decrease around $30 per gross ton over July, while prime scrap is expected to ease marginally.

“Despite what I think is slightly better US scrap demand in August relative to last month, we are confronted with a considerably weaker global scrap market this time,” said one Northeast scrap executive. “Shredder feed flows are ok but not hot, and other obsolete grade flows are quite weak. That will limit some downside for obsolete grades.”

Another source commented, “Domestic demand has cooled off to a degree and export prices have plummeted since the beginning of July after showing some strengthening in June. Domestic scrap flows are more than sufficient to supply both markets segments.”

One executive stated that mills are still eager to lessen the spread between prime and obsolete scrap, but remarked “It’s already pretty narrow and can’t contract that much more.”

Regarding conditions outside of the US, sources comment that falling Asian steel demand and prices are deteriorating the global market. A source summed the situation up as follows: “We can point to a bunch of factors limiting global steel demand—continued Covid lockdown issues in China, real estate market illiquidity and mortgage payment refusals in China, a weakening Turkish lira and inflation, cheap semi-finished product availability…These issues and a handful of others all feed off one another and result in very poor demand and falling prices across Southeast Asian and MENA regions.”

We will report on final August scrap figures around the second week of the month.

Recall that SMU scrap price indices in July were: Busheling at $480–530 per ton, averaging $505. Shred at $430–450 per ton, averaging $440. HMS at $340–380 per ton, averaging $360.

PSA: You can chart out scrap prices as far back as 2007 using SMU’s interactive pricing tool.

By Brett Linton,

The post August Scrap Prices Expected to Slightly Weaken appeared first on Steel Market Update.

Latest in Market