Secondary ferrous scrap said poised for a price fall in August

US ferrous scrap dealers shared concerns about the domestic market’s outlook, citing market chatter that cut and shredded scrap prices could fall in the upcoming trade despite shrinking flows into recycling yards

“Rumors are August is down another $40 [per gross ton] in Texas. Meltshops are running 65-75% shred for the melt, but [things] are starting to look worse,” a seller into Texas, who estimated that a $40- to $50-per-gross-ton price cut could be on the horizon for shred, told Fastmarkets.

A Midwest shredded scrap source said that “mills have been spoiled and got so used to good [finished] steel prices. Now shredded has dropped too much and shredder feed is drying up.”

That source heard that shredded scrap prices could drop by $25 per ton in August.

The uncertainty in the domestic secondary scrap market comes amid a recent uptrend in export pricing.

Last week, exporters on the West Coast booked a pair of bulk cargoes to India at increased prices. Rising demand from Turkey prompted East Coast sellers to raise their prices as well, but market participants in the area were concerned that the higher prices would not be sustainable.

“Shreddable scrap is drying up, but I hear export will be dropping $30 per tonne over the next $30 days,” an Alabama broker said, echoing concerns from exporters that the current prices will not last.

Meanwhile, steady declines in hot-rolled coil prices have been dragging down No1 busheling prices as well.

Fastmarkets’ daily steel hot-rolled coil index, fob mill US has gone down from a recent high of $75.65 per hundredweight ($1,513 per short ton) on April 8 to $43.28 per cwt ($865.60 per ton) as of Friday July 15.

“I don’t know whether we’ve found the bottom yet,” a Midwest mill buyer, who consumes prime scrap, said. That mill buyer expects supply of cuts and shred to shrink in August, but said that mills will adjust their buying programs to include more busheling following its precipitous price decline over the past two months.

Such an adjustment could slow the price fall for busheling. At the same time, reduced demand for cuts and shred could limit the impact of tight supply on prices for those grades.

Another mill buyer said that weakness in hot-rolled coil mill order books will continue, suggesting steelmakers will have modest buys in August.

“A guy I sell for said he is holding his scrap for higher prices. I told him he can hold it until next year because it isn’t going up this year,” the Alabama broker said.

Fastmarkets’ regional shredder feed price assessments were mixed over the past week, with different yards in both the Southeast and Midwest alternately raising and lowering their prices from the week earlier. Only shredders in the Ohio Valley region refrained from lowering their prices.

“No one is getting any flow into their yards, and [most] are not busy. Other people I have talked to are saying the same thing,” a recycler in the Ohio Valley region said.

Fastmarkets’ weekly assessment of steel scrap shredder feed, fob Southeast was at $132.36 per gross ton on Monday July 18, unchanged from July 11.

The price assessment for steel scrap shredder feed, fob Midwest was $151.92 per ton on July 18, up 0.53% from $151.12 per ton on July 11. And that for steel scrap shredder feed, fob Ohio Valley rose to $167.85 per ton on Monday, up 2.80% from $163.28 per ton on July 11.

What to read next
Key data from Fastmarkets’ aluminium ingot ADC 12 pricing session in China on Wednesday November 30
German equipment provider SMS Group will provide a logistics and storage system for a forthcoming $238.7 million aluminium foil plant being built in the US by South Korea’s LOTTE Group to meet demand for the material’s use in electric vehicles (EVs)
Fastmarkets has corrected its price indices for US- and Northern Europe-origin steel scrap, CFR Turkey, which were published incorrectly on Thursday December 1 due to a technical error.
Fastmarkets has today discontinued its price assessment for hot-briquetted iron export, fob main port Venezuela (MB-FE-0002).
After a consultation period, Fastmarkets has launched a weekly indicator for direct-reduction (DR)-grade iron ore pellet premiums, known as the iron ore DR-grade pellet premium indicator, $ per tonne.
Fastmarkets has corrected the average calculation of its prime scrap prices in Pittsburgh.
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
Proceed