US Scrap Trends Outlook: August

The US steel scrap market may drag the bottom in August with the market caught in a stalemate between tight supply and low demand

Outlook for steel scrap price in August

Steel scrap prices will walk the line between tight supply and low demand to potentially sideways pricing in August’s monthly trade, with lackluster fundamentals failing to pick prices up from what many view as the market bottom.

The Trend Indicator has tipped into very moderate bullish territory with a reading of 52.2 for the month versus a significantly more bearish 39.4 posting in July. The Outlook’s prediction model allows for an average month-on-month price increase of 2%.

Half of those surveyed expect steel scrap prices to remain unchanged in August, with an equal majority of participants –31.58% – attributing this expectation to unchanged market fundamentals and lower supply, respectively. A lesser 22.81% of respondents pointed to lower demand as the driving factor behind next month’s price move.

Cuts scrap grades to rise in August

Cut scrap grades are trailing slightly behind the touted top performer primes (47.34%), with 36.84% of participants believing they will be the best-performing grades in August. Heavy melting scrap in particular, has been in the crosshairs for an increase of as much as $20 per gross ton next month in some markets, with sources suggesting that prices for that grade cannot go any lower.

This is despite progressively lower export deals made to Turkey over the course of July; a tally of seven spot sales have been concluded at a $27-per-tonne decrease over the course of the month for an 80:20 mix of No1 and No2 heavy melting scrap.

Shredded scrap is once again less desirable than its cut and prime counterparts despite reports that shredders in certain parts of the US have been forced to raise scale prices to increase inflows into yards amid exceptionally tight supply of the grade.

Spot activity for hot-rolled coil remains muted, limiting upside for primes and shred despite weak flows. Overall trend consensus remains little changed, up to 63% in August from 60% in July. Learn more.

Make sense of the US steel scrap market and track the critical indicators impacting steel scrap price movements in our latest outlook.

What to read next
China’s non-grain oriented electrical steel prices rose in the two weeks to Friday October 11, on price hikes by Chinese mills and amid India's anti-dumping probe into Chinese imports, sources said.
Scrap processor TSR will supply aluminium flat-roller Novelis with high-grade European aluminium scrap that can serve as a “sustainable P1020 substitute,” a TSR executive told Fastmarkets on Thursday October 10.
These are the fundamental questions our customers are asking us about the European Union Deforestation Regulation (EUDR) and how it will impact their business.
Read a snippet of the monthly paper packaging monitor, analyzing key trends in the North American paper packaging demand, production, shipments, inventories, capacity, operating rates and trade.
Fastmarkets has corrected MB-STE-0894 steel scrap, HMS 1&2 (80:20 mix), month-to-date deal-weighted average, North Europe origin, cfr Turkey, $ per tonne, which was published incorrectly on Monday October 7.
Here are the key takeaways from market participants on US ferrous scrap metal prices, market confidence, inventory and more from our October survey