Ferrous Scrap Settlements Up $40-$55

Written by John Packard

Not all regions of the country have settled but we are seeing ferrous scrap prices increasing to the domestic mills by $40 to $55 per gross ton. The variance is depending on region and at what point prices started.

Out of the Midwest and Southeastern markets we heard from one of our sources, “It’s been a bit of a mixed bag in the SE markets with most grades trading up $40-50/gt on firm demand.  We didn’t move quite as sharply as the Midwest and Northeast given we started at a bit stronger base.  Pricing has shaken out in the $255-265/gt delivered mill on shred and p&s, $265-275 gtd on prime grades, HMS $245-255 gtd.  We’re anticipating better inbound obsolete flow at these improved prices which should provide for a more balanced supply/demand scenario heading into May.  It will be interesting to see how steel prices respond to the move higher in raw materials and whether this draws more domestic capacity on-line and/or rekindles imports.  Without question, it will be a delicate balancing act…”

Off the East Coast we heard, “I would not say that the market has completely settled yet.  The few mills in the east have bought cut grades at up $45/GT and shred at up $55/GT.  I believe Chicago was up $50, and several Southern deals I am aware of were higher by $50/GT.  DJJ tried buying at +$40 but ran into a lot of resistance and began quietly paying +$50.  Highest shred number I have heard was $275/GTD down south, and highest prime number was $280/GT, but there could be higher numbers.

Export sales this week reached as high as $254/MT cif and are expected to continue to climb.  Imported billet to Turkey is less available forcing them to buy more scrap.  The Turks have committed over the past several weeks to nearly 500,000 MTs from the US.  When was the last time that happened?  It’s been a while.

The sentiment now is that flows will improve because of the price and season, but strength should last into May.  Beyond that, it will depend on demand providing some support.”

SMU opinion is SSAB took their prices up by $60 based on their mill having to pay more for scrap in April. NLMK does have an EAF mill in Portage, Indiana but also runs slabs out of Russia in their Farrell, Pennsylvania operation.

It will be important for steel buyers to watch scrap prices (and flows) as we move through the month of April  and into May.

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