As Steel Market Update reported, scrap prices are starting to become clearer as buyers and sellers of scrap return from the 4th of July holiday. At this time, it looks like scrap prices in the Midwest are generally sideways to maybe up $10 per long ton ($465 per long ton for shred and $425-$430 on HMS). On the east coast, one of our dealers (see quote below) has the numbers up $15 per ton.
Our east coast scrap sources as well as those located elsewhere around the country are indicating prime grades such as #1 busheling are still in the process of being settled and are stronger than obsolete grades. We are hearing prime grades as being $490-$520 with some pockets in the country higher than $520 per long ton.
Pig iron is reported to be stable with many large buyers still needing to make 4th Quarter purchases.
Here is what one of our East Coast scrap sources told us earlier this week.
“A good number of deals were concluded last week - on the east coast, $455-$460 for shred, $445 for plate and structural and $430 for #1 HMS. Prime is still settling though I think it will be around $490. All those numbers are basically up $15 m-o-m.
Export activity has been quiet as well and exporters are continuing to try to push prices down to $405-$410 for 80/20 export grade material. I don''t think they will be able to buy much if anything at those levels as the price disparity is too wide and dealers know they will have to raise prices when the Turkish buying resumes.
In the mid-west, shred was basically at $465, though I heard a few $470 numbers. Plate and structural and #1 steel were $10-15 higher than the east coast numbers. Those numbers were also up about $10-15 m-o-m.
I heard the same about the Turks getting some pricing power back on rebar but I have not heard of any new bulk shipments other than one or two last week at numbers about $5 lower than the best prices we saw in June. I keep hearing the Turks need scrap and will be back in shortly.
Flows remain about the same. Mill outages in August could make for some weaker domestic demand in spots. Export of course will put a floor on any weakness.”
SMU is hearing from our sources those scrap companies which sold “early” may have gotten better pricing than those selling now or waiting until later this month. There does appear to be some “softening” in scrap prices as the original thought process was for prices to be up $10-$20 per long ton in the Midwest and that does not appear to be what has happened.
A large Midwest based scrap dealer told us, “Prices initially started as flat, but now are weakening. Further declines in domestic demand due to maintenance outages (planned and otherwise), have placed additional downward pressure on scrap prices to the tune of $5-10/gt.”