Market
April 30, 2024
Optimism wanes on ferrous prices
Written by Stephen Miller
The May market seems to have lost its optimism in the week after the Recycled Materials Association (ReMA) Convention in Las Vegas.
Prior to this, the scrap community was thinking that prices could increase for May since export prices held their ground and pig iron prices looked to increase. Over the last week, the Turkish mills have been quiet, and prices for new cargoes usually drop when Turkish buyers remain on the sidelines.
Regarding pig iron, after one cargo sold at $450/mt FOB over two weeks ago, there has been a new booking, as a U.S.-based buyer has managed to buy a cargo from South Brazil at $440/mt FOB Brazil for June shipment. The producer channel had been offering at $450, but concluded per above.
The lack of optimism was reflected in RMU’s scrap survey results, which were released this week.
About two-thirds of the respondents indicated ferrous scrap prices should remain stable, while one-quarter thought they would increase. Only 7% said prices would drop in May. Over the next three months, 63% of survey respondents thought ferrous prices would increase, 31% said they would be stable, while only 6% indicated prices would decrease.
Absent some significant event occurring in the steel or scrap business, this may be a bit optimistic as the market usually languishes during the early summer.
RMU reached out to a mill-buyer in the Great Lakes region for his views on the direction the market will take in May.
“I believe scrap supply is decent and not as bad as dealers say,” he said. “Would not be surprised to see another sideways market as the strength everyone talks about is not necessarily there yet.”
Several dealers we have contacted are saying the same thing. They seem to be satisfied with pricing going sideways for May. So far, there have been two mills who have canceled orders from April. The May market could form anytime, but it’s likely to wait until late this week or next week.
