Bush, Shred Prices Down in July, HMS Mostly Sideways

Domestic scrap prices fell for busheling and shredded grades in July, while tags were mostly sideways to slightly up on heavy melting scrap, sources said.

“Between tight scrap supplies, slightly better-than-expected domestic demand in the South and Ohio Valley, and relatively stable export pricing, the market trended sideways for obsolete grades in those regions as well as in the Northeast,” one scrap source said. “Prime grades were lower generally by $20 (per gross ton) across the board outside of the Midwest.”

The early trade in the Midwest pushed prices lower by $20 per gross ton (gt) for shred and $30/got for prime. But those prices were not repeatable in other regions of the country, he said.

A second scrap source agreed. “Initial prices came out in the Midwest at down $20-30 for various grades, and were met with very limited success, especially from suppliers to the South and East,” the second source said. The prevailing feeling is that the market has bottomed, he said.

Scrap prices rose from December to March but have been slipping since April, roughly following the trend seen in sheet prices.

A third source said the mills in the North took advantage of displacements of material. “This is mainly because of the continued closure of the Illinois River, which left scrap stuck in Chicago,” the third source added.

He noted that scrap from this area usually flows downriver to mills in Arkansas. “This is why the southern market largely went sideways on shredded and HMS.”

Looking ahead, the second source said, “Expectations of similar pricing levels for August are common.”

The first source said, “We are in the dog days of summer, as some call them, meaning it’s hot, prices are a little lower than they were in the spring, and scrap flows slow down.” 

He noted that a slight push of demand in August could send the market higher, adding: “Likewise, lower export pricing or reduced finished steel demand could keep the market sideways at best or cause it to fall a bit.”

“Either way, absent a real price crash or increase overseas, I expect that we will trade in this range for a few months, which is probably a welcome situation for dealers and mills,” the first source said.

With scrap prices settled, SMU’s July tags stood at:

• Busheling at $430-460 per gross ton, averaging $445, off $15 from the previous month.

• Shredded at $370-410 per gross ton, averaging $390, down $15 from the previous month.

• HMS at $290-330 per gross ton, averaging $310, up $5 from the previous month.

Editor’s note: SMU members can chart scrap prices as far back as 2007 using our interactive pricing tool.

By Ethan Bernard,

The post Bush, Shred Prices Down in July, HMS Mostly Sideways appeared first on Steel Market Update.

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