Will the pricing trends for 'obsolete' and 'prompt' converge in August?

RMU contacted ferrous market players in both the Southeastern region and the Midwest regions about the direction of the ferrous scrap market for August.

One executive in the Great Lakes district confirmed the flow of shredder feed and obsolescent scrap did not change in July. All his orders for shredded scrap have been delivering to the mills without issue, and he believes shredded scrap can trade sideways from July in the Midwest.

There will not be any significant resistance because, with the price of the non-ferrous metals down lately, dealers may hold these grades and sell all their ferrous shredded scrap for cash flow reasons, he noted.

He also said the scrap industry in the U.S. is “overly efficient” at collecting, processing and shipping ferrous scrap. This is sometimes “to their detriment,” he said. He thought industrial grades could rise from July levels.

Another scrap executive in the Southeast region said his obsolescent flows are just off fractionally from previous months. He attributes this minor decline to “the dog days of summer.”

There seems to be more demand for prime grades as several large consumers have requested more shipments on the TBD orders as the ferrous market forms, most likely during the first week in August, he pointed out.

Regarding export, he said containers of shredded received a $10/mt bump in prices this month into the mid-$380’s/mt on an FAS CY basis.

All in all, there looks to be a narrow opening for a rise in obsolete scrap prices. But prompt scrap looks like it will be higher in August.