Week in review and the foggy look ahead

On the ferrous side, a deal was closed on a pig iron cargo from Brazil at $470/mt CFR, though producers were eyeing a range of $475/mt to $480/mt. The export market on the U.S. East Coast has quieted down this week — U.S.-based exporters sold cargoes 10 days ago at $390/mt, but there hasn’t been any sales since. It has been confirmed that several mills in Turkey have purchased multiple cargoes of billets from China to roll into rebar, rather than using scrap in their EAFs. This may put downward pressure on global scrap markets, especially countries that are supplying Turkey.

Additionally, Turkey continues to rally support for their new association, AFID, which aims to secure raw materials, despite facing scrutiny from the EU and UK over potential protectionist practices.

Non-ferrous market update

On the non-ferrous side, the market is still bracing for the arrival of a major manufacturer with a new facility that’s set to be a significant buyer of UBCs. While they haven’t started melting anything yet in Mississippi, word is they could be active as early as Q4 2024. This anticipation is already causing some to hold back supply.

UBC incentives remain steady at around 76% of mwtp compared to previous years. Prices aren’t bad, but with the current heat waves, people seem less motivated to cash them in. Both deposit and curbside collections are stagnant at the yards. It seems major manufacturers are still unsure of their direction, possibly hesitating to embrace aggressive Extended Producer Responsibility (EPR) measures that could make it costly not to implement serious recovery plans.

Consolidation plays continue

In other news, Trinidad & Tobago (TT) Iron Steel Company Limited has acquired the iron and steel plant in Point Lisas Industrial Estate, Couva, Trinidad, from the liquidator of ArcelorMittal Point Lisas Ltd. TT Iron plans to begin revamping the plant immediately, with operations set to start within 12 months. Their goal is to produce green steel in a phased, commercially viable manner, contributing to the local green economy and sustainable development.

Gebhart Holdings has expanded its capabilities in metal production in the South by acquiring Imperial Aluminum’s assets in Scottsboro, AL.

Additionally, Charter Manufacturing has bought scrap metal recycler Niles Iron & Metal. Both family-owned companies will continue their legacies, capitalizing on their existing collaboration.

RMU survey insights

Our latest RMU sentiment survey revealed the usual counterpoints — “the market is balanced,” while others argue that “scrap is not.” Processors are reportedly still short on supply. One major manufacturer mentioned that “demand is slightly softer than the scrap return.” Traders and brokers offered a more grim outlook, stating that “global demand for steel remains stagnant,” with some holding out hope for a turnaround later this year. A few respondents are cautiously optimistic about a potential $30/mt-$40/mt price rally in August.

Economic news

The U.S. political landscape is heating up, creating a volatile environment as we approach the 2024 Presidential race. This uncertainty is making risk managers wary, pulling back as they navigate the shifting terrain. The industrial sector, caught between mid-stage earnings and geopolitical risks, is yearning for stability, but the politicization of 2024 will likely dominate the narrative.

The Consumer Confidence Index shows that consumers grew a bit more pessimistic about their finances in July, which could stifle manufacturing and further decrease demand for recycled metals.

• Below are some of the major economic reports coming up this week that can move the scrap markets on pricing, demand, and overall economic sentiment: