US ferrous scrap pricing for the month of September is seen sideways to lower in the US Midwest on scant finished steel demand and reduced steel capacity due to outages, while US East Coast scrap is expected to perform better, with a sideways assessment expected across all grades at presstime, largely due to better demand and higher prices from key scrap exporters, scrap market insiders told SteelOrbis this week.
“There’s really not that much demand for finished products, the flat rolled market is dead, and there’s operational problems, with some mills taking downtime (performing maintenance) because their order books are weak,” an East Coast scrap insider told SteelOrbis this week. “Many mills are moving their outages up 30-60 days, so we don’t think the markets are going to be very active over the next several months.”
As the SteelOrbis Scrap Forecaster went to publication, September scrap transactions began to be reported, giving a greater sense of surety to recent scrap assessments.
“While it’s still kind of early, we heard that Steelton (Cleveland Cliffs) purchased East Coast HMS#1 at $300/gt ($305/mt) and P&S at $330/gt ($335/mt) for small batches,” the East Coast scrap insider said a day later. “They reportedly didn’t need a lot because they had some downtime (for plant maintenance) and some operational problems.”
In the US Midwest, the September scrap outlook has shifted from sideways for all grades during the last week of August to sideways for all grades except shredded, which is seen last down $20/gt ($22/mt).
“In the Midwest, shredded is seen the weakest,” said another Midwest scrap insider. “We’re seeing a shortage of cut grade scrap (HMS#1 and P&S), so the call is looking sideways now for them.” Busheling scrap is last seen sideways, unchanged from earlier in the September scrap assessment period.
“The talk is that there is not a light at the end of the tunnel,” said one Midwest scrap broker about current market conditions. “The market fundamentals remain weak, however, there’s still not a lot of scrap available, so we’ll see.”
While it remains early in the market discussions, based on the most recent market consensus, Midwest prime busheling scrap for September is assessed sideways to the August settle of $355-$375/gt ($361-381/mt) delivered to mill. September shredded scrap is assessed $20/gt below the August settle of $370-380/gt ($376-386/mt), while September HMS#1 is seen settling sideways to the August settle of $320/gt ($325/mt). At current, P&S scrap is discussed sideways as well to the August settle of $345-355/gt ($351-361/mt) delivered to mill, insiders said.
On the US East Coast, September busheling scrap is expected to settle sideways to the $350-385/gt ($356-391/mt) delivered to mill August settle, while shredded is talked sideways to the $370/gt ($376/mt) August settle. HMS#1 and P&S scrap are also forecast to settle sideways to the August settles of $290-315/gt ($295-320/mt), and $320-340/gt ($325-345/mt) delivered to mill, respectively, market insiders told SteelOrbis.
Market insiders explained that the earlier expectations for lower September scrap pricing for East Coast cut grades (HMS#1 and P&S) was changed to sideways most recently, as export sales for deep sea scrap to Turkey were confirmed at higher levels than initially expected.
“We heard late sales of most likely 40,000 tons of HMS I/II 80:20 scrap to Turkey at $370/mt CFR,” said one East Coast scrap dealer. “That’s up $7/mt from the last reported trade.” He continued, “The word is that Turkey might have to buy more scrap, so pricing might go up another $3/mt.”