Platts reported that modest demand from domestic steel mills coupled with steady export activity is straining limited US ferrous scrap supplies and putting upward pressure on pricing.
Based on early transactions and indicative pricing for July, Platts raised its price assessment for shredded scrap to a new midpoint of USD 240 per long tonne delivered to Midwest mills, up by USD 35 and reflecting a wider trading range of USD 230 to USD 250 per long tonne.
An Ohio Valley scrap processor said that he was already shipping July material to mill customers with whom he has solid relationships and would determine prices when the market settled, most likely next week sometime. He said he expected shredded material to be up USD 45 to USD 50 per long tonne, landing it at about USD 250 per long tonne normalized to the Platts assessment.
The Ohio processor said that prime material would be up more, possibly USD 75 to USD 80 per long tonne, putting it at roughly USD 300 per long tonne after June prices of some USD 225 to USD 230 per long tonne. After remaining largely flat in June when sources thought the price would rise due to the many auto plant shutdowns, the prime scrap price now appears poised to rise in July because of supply side constraints and a virtual dearth of generation.
One major scrap processor and supplier said he had heard that shredded scrap had transacted domestically as high as USD 260 per long tonne, but could not verify the figure. A sale of heavy melting scrap number 1 & 2 80/20 blend fetched USD 320 per tonne CFR Vietnam, which with a USD 65 freight component netted back to USD 255 per tonne FOB East Coast docks. He said shredded would likely command an extra USD 5 per tonne.
A Southeast scrap processor exporting shredded scrap in containers from the Port of Savannah, Georgia, said that USD 255 per tonne is too low a price for his material. He added that "I would not be a seller at that figure. I'm very optimistic. The right concept seems to be to wait and see who buys what and at what price."
It may be noted that the US scrap price increase tracks with upward movement in European scrap prices late last week, when Platts raised its European ferrous scrap price assessments, though not as steeply. Prices for HMS number 1&2 80/20 rose by USD 20 per tonne to USD 255 per tonne FOB Rotterdam, while pries for A3 grade rose by USD 10 per tonne to USD 255 per tonne FOB Black Sea.