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Traditional summer production slowdowns and a dearth of robust export options are expected to enact further downward pressure on the US steel scrap market in July, marking a potential third consecutive month of steel scrap price drops across all grades.
Despite the Trend Indicator rebounding marginally to a reading of 39.4 in July compared with a more-bearish posting of 34.4 in June, the outlook’s prediction model still allows for an average price decrease of 7.2% over the period.
Just under half of those surveyed – 48% – deemed that steel scrap prices will be lower in July versus June, though those survey participants anticipating a sideways market over the period – 37% – were hot on their heels.
The majority of participants’ expectation that the market will move lower in July is attributed to weaker scrap demand, according to an equal number of respondents. Exactly half thereof assessed that inventory levels would remain unchanged in July, tipping market fundamentals into weaker territory as a result of this declining demand.
Shredded scrap is once more deigned to be less desirable than cut and prime grades; many US shredders have continued to drop their infeed prices in a sure-fire sign that steel scrap prices for the grade are headed down again. Prime scrap will be the star performer as per 54% of survey respondents with a recent slew of hot-rolled coil increases from US steelmakers likely to stabilize the market for those grades at best.
Overall trend consensus has dropped to 60% in July from 65% in June, suggesting that confidence in the market’s trajectory next month is wavering.
Make sense of the US steel scrap market and track the critical indicators impacting steel scrap price movements in our latest outlook.