U.S Ferrous Scrap Prices Stay Steady in June

Steel Market Update’s sources reported that the June ferrous scrap trade produced slightly higher prices on prime grades of about $10 per ton and little change on obsolete grades.

“There was a significant supply of shredded and cut grades offered into the market, which is not unusual for a June trade. Under market conditions like those in recent years, that would have meant a decline around $20. But because of what’s happening today, demand is very strong and the supply was bought at largely unchanged prices,” said a dealer in the Northeast.

He pointed to a few exceptions along the East Coast where shredded traded down reflecting weaker export pricing. “The minimills scooped up available prime grades to supplement their supplies in the midst of a shutdown at [Nucor’s] DRI plant, looming manufacturing shutdowns that will reduce prime scrap supplies in July and August, and recent increases in pig iron prices,” he added.  

The slide in export pricing seems to have stopped. The stronger lira in response to more supportive moves by the Turkish Central Bank, and the evening out of tariffs on steel imports into the U.S., helped bring Turkish mills back to U.S. scrap suppliers. Several sales were made in the low to mid $340s CIF for 80/20 grades and $355 CIF for shredded and bonus grades, the dealer reported.

“Looking forward, I think we will continue to see more stability into next month. Scrap flows should continue to remain strong through June before dissipating in the dog days of summer come July and August. But mill demand should remain firm, too, and if we see continued purchases from international buyers at current price levels we should see at least sideways prices in July,” he said.

Another SMU source in the East expects U.S. scrap prices to remain firm over the next two months. “With the markets at these higher levels, any price changes less than $20 per gross ton should be regarded as minor adjustments and not trend setters,” he said.

“The export markets are firming with Turkey booking cargoes from the Baltic and now four from the USA/Canada. Prices have jumped about $7-10 per metric ton and should increase on the next round of bookings,” he added.

John Harris of Aaristic Services says the market went through an adjustment period this month with prices increasing on prime by $10 to $15 per ton and decreasing on other grades. Going forward, he expects prices and volume purchases to hold through July with change expected in August. “For the scrap industry, it’s a two-month transition where markets go up or down. Current heavy flows to steel mills can be supported through July, but as industry takes outages for re-tooling and summer holidays, busheling availability will drop,” he said.

Mike Marley of World Steel Exchange Marketing said prices for busheling and bundles could move up as the flat-rolled mills build inventory ahead of the summer shutdowns at auto stamping plants in July. The maintenance shutdowns at Nucor’s DRI plant in Louisiana and Voest Alpine’s HBI plant in Texas will add to the scrap demand. “The market is still troubled by the inability of the railroad and trucking companies to deliver scrap on time,” he added.