Scrap Market Has Upward Blip Now Trending Sideways

The Detroit scrap market settled on Monday with cut grades (such as heavy melt or HMS) rising by $10 per gross ton and shredded scrap by $15 per gross ton. Prime grades, such as #1 busheling traded sideways compared to last month.

Our scrap sources are telling us that the best deals made (from a trader’s perspective) were made late last week. Since then prices have come back in (lower) and those steel mills who waited have been able to get better deals.

There is some posturing continuing in regional markets as some dealers are trying to hold out for up $10 and the mills in their area are standing pat at sideways pricing.

One of the scrap dealers located on the east coast told SMU, “The best prices from the dealers’ perspective were to be had last week when we saw shred in the $390-95 range in the Southeast and OH Valley.  SDI needed scrap and came in and bought.  Nucor/DJJ seemed to have better inventories and waited until this week to buy.  Prices have tapered since then.  Primes are generally unchanged at this point and shred is under $390/GT.  In the Mid-Atlantic, a furnace breakout at one mill with a planned large buy for July and a planned smaller buy at the other major mill in the region allowed them to buy at sideways for obsolete grades, and only slightly higher for prime grades.  Steel mill demand overall seems softer than it has been and for the first time in a while there is enough supply of scrap to satisfy demand.” This dealer told us that the initial shredded scrap deals in the Ohio Valley were done up $10 to $15 per gross ton compared to June.

We heard from one national buyer that prices have been slower to develop in the Southeast markets. He told us, “Increasingly appears consumers/dealers are working toward an unchanged market across the board for July.”  

A trader told us that prime grades would move higher by approximately $10 per gross ton in those areas which had limited supply like the East Coast. Pig iron prices were reported to be $410 per metric ton, CFR New Orleans (NOLA).

According to SMU scrap sources, so far the Nucor DRI facility is having little impact on sales of pig iron or scrap pricing.