Winter weather around the country is hampering the in-flows of scrap to dealers around the country. Heavy snow in the East has shut down many dealers this past weekend (prime collection time) and the forecast is not looking good for collections over the next week or so as more snow is expected. According to our sources what is holding scrap pricing in check is the lack of exports to the Turkish and Chinese steel mills and the weak order books at rebar producers.
Prices for prime grades such as #1 Busheling are reported to be $18-$20 per long ton higher than last month in the Midwest and our sources are pegging busheling at $400-$410 per long ton delivered mill. On the East Coast prime grades are reported to be slightly less at $385-$390 per long ton delivered mill.
For Nucor sheet contract customers they may well be looking at an additional $15-$20 per ton raw material surcharge in their next pricing adjustment.
Shredded scrap is one product which is taking a slight hit this month with Midwest prices down approximately $10 per long ton from January. This puts shred at $335 per long ton delivered mills out of the Midwest. In the East the number is slightly lower at $325 per long ton delivered according to our East Coast sources.
Heavy Melt (HMS) has been trading sideways so far this month with the product trading at $300-$305 per long ton delivered. On the East Coast HMS is at $275-$280 per long ton delivered.
Virtually every dealer with whom we communicated over the past few days is pointing to the weather and lamenting about “poor in-flows of new scrap” and then with a hint of a smile in their voices – forecasting higher scrap prices for March. We shall see.
We will have to wait and see if the lack of significant movement in scrap prices causes the domestic mills to hesitate with price increase announcements. As I look back on mill history the only thing that stops mills from raising prices is when the bottom falls out and the prices head in the opposite direction….
Isn’t AK Steel due for a price increase announcement right about now…?