Scrap Prices Expected to Fall Further in July

Written by Brett Linton

Steel Market Update sources expect ferrous scrap prices to fall again in July, the third consecutive month of declines since March and April’s record high prices. Both prime and obsolete grades are expected to decrease $50 per gross ton or more, with some saying prime could fall as much as $100 per ton.

“The swiftness and force with which the export market has dropped over the last 75 days was remarkable,” said one Northeast scrap executive. “This puts export pricing at a significant discount to US domestic prices, laying the groundwork for a weaker July market here.”

Another source echoed those thoughts, commenting, “Export [market] terrible and domestic steel order books are weak. Big drops coming in July.”

One executive said multiple factory outages are scheduled in July, likely restricting prime scrap supply in August. Regarding July declines, he commented “I highly doubt primes will be down $100 – that sounds like a mill buyer’s wish to close the prime and obsolete gap further. … $100 is a lot for dealers to swallow.”

Recall that the SMU price indices for scrap in June were: Busheling at $600-670 per ton, averaging $635. Shred at $450-480 per ton, averaging $465. HMS at $370-420 per ton, averaging $395. Back in March, scrap prices saw the largest monthly increase in our history, with shredded scrap trading up $125 per ton to $600 per ton and prime scrap up $170 per ton to $700 per ton. Prime scrap rose another $75 per ton in April, while shred was unchanged. In May, scrap prices declined by $75 per ton, putting busheling at $700 per ton and shred at $525 per ton.

Prices had declined in January and February before the Ukraine-Russia war.

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

By Brett Linton,

The post Scrap Prices Expected to Fall Further in July appeared first on Steel Market Update.

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