Scrap Prices to See Modest Bump in March

Ferrous scrap prices for March delivery are expected to increase by around $10 per ton, report Steel Market Update’s scrap market sources.

“Strong demand for raw materials both domestically and internationally are allowing little chance ferrous scrap prices will drop in March,” said one East Coast dealer. “All the mills I sell to will have full melt programs in March, and most of these mills are behind on February scrap deliveries. March-April scrap prices are showing a positive bias.”

March ferrous markets look firm, concurred another dealer in the Northeast. He described mill demand as quite solid with no real weakness in the U.S. or overseas. “I would call the market at this point up $10 pretty much across the board, and the risk is to the upside. Inflows have been seasonally weak and dealer inventories are not particularly high, though they will improve over the course of March and into the spring.”

Mike Marley of World Steel Exchange Marketing reports that some scrap dealers have revised their outlook for ferrous scrap prices in March from sideways to up by at least $10 per gross ton. More realistic, said several, prices could be unchanged for industrial steel scrap but higher for shredded scrap and other obsolete grades that have been in tight supply for the past two months.

Mills expect scrap markets to move sideways or up a modest $10 per ton due to several factors, said John Harris, CEO of Aaristic Services, Inc. Mill capacity utilization is over 75 percent and rising, while scrap collection has been hampered. High water levels have slowed barge transport in the Midwest. Trucking’s new rules restricting drivers’ hours of service are creating havoc for shippers, while rail cars are in short supply. Scrap export volumes to Turkey are up considerably.

Scrap prices for January and February were reported at around $326 per gross ton for #1 HMS, $344 for shredded and $386 for busheling. Harris expects scrap prices to hold steady in March and April, but then to begin decreasing as spring scrap collections and increased demolition boost the scrap supply. “With all the hype on Section 232 and recent suggestions of higher tariffs on imports, steel sales price increases will further energize the scrap yards to hold out for higher prices,” he added.