US scrap prices for July are now seen sideways to $10-$20/gt ($10-$20/mt) less than June levels depending on the region, as finished steel demand continues to wane, and reports circulate that steel producers began issuing cancellation orders for as of yet undelivered June scrap -indicating the likelihood that steel mills expect lower July prices- market insiders told SteelOrbis this week.
Market insiders said recent hot weather in the US Midwest and Northeast and continued low prices at scrap yards has caused scrap inventories to be off between 20-30 percent. They told SteelOrbis that previous calls for scrap to decline as much as $40/gt ($44/mt) no longer were the norm, and that a more conservative $10-$20/gt ($10-$20/mt) across most grades, with the possible exception of primes (which could remain little changed), was more representative as the July buy cycle neared its conclusion. July scrap is expected to settle by Tuesday, July 9.
The developing consensus for sideways to lower for July differs from the week of June 24, when talk of higher international scrap prices, tight inventories at East Coast scrap yards, and strong exports from the US bolstered the July outlook to sideways to potentially higher, especially on the US East Coast. The end of week outlook was short-lived, however, and the outlook once again began to lean towards a flat to lower July expectation, purely on lack of finished steel demand, market insiders said.
On July 1, US steel maker Nucor reduced again its weekly Consumer Spot Price -the price it charges for hot-rolled coils at all of its producing mills- by $10/gt ($11/mt) to $670/st ($739/mt) FOB mill, the steel makers said in a letter to all of its customers. This follows a more substantial $35/st ($39/mt) decline the week of June 24 to to $680/st ($750/mt) FOB mill. Since releasing the CSP index in early April, Nucor’s HRC prices have declined more than 19.3 percent as demand for finished steel goods remains muted amid high interest rates, soaring year-over-year inflation statistics, high energy prices, and a looming US presidential election in November.
This week, delivered to mill Ohio Valley busheling scrap is discussed at $375-$385/gt ($381-$391/mt), while shredded is talked at $365-390/gt ($371-$396/mt) depending on quality, dealers said. Five-foot P&S Midwest scrap vicinity Cleveland and Chicago is discussed on a delivered basis at $340-$360/gt ($345-$366/mt). For HMS#I, basis Chicago, Cleveland, and Pittsburgh pricing is discussed at $300-$330/gt ($305-$335/mt) delivered to mill.
US East Coast busheling delivered to mill is last discussed at $335-$340/gt ($340-$345/mt), while P&S is talked by dealers at $320-$325/gt ($325-$330/mt). Shredded and HMS#1 are discussed at $360-$390/gt ($366-$396/mt), and $290-$295/gt ($295-$300/mt) delivered to mill, respectively. East Coast containerized shredded scrap for export is last discussed at $385-$390/gt ($390-$395/mt), with strong interest continuing from India and Pakistan, market insiders tell SteelOrbis.