Final Thoughts

This will be an interesting week as we watch to see how the negotiations between the domestic steel mills and their suppliers end. Expectations are mixed. Late last week we received a note from one of the larger scrap companies in the U.S. They told us, “Generally speaking, obsolete scrap flows have remained tepid in March.  While dealers sold fewer tons in March given open contracts for February, inbound obsolete remained constrained as smaller dealers and auto hulk suppliers opted to hold out for higher numbers in April.  It would appear that steel imports are slowing and we’re seeing increasing BOF outages, both trends could bode well for EAFs over the next 30-60 days which may firm scrap demand, particularly given current scrap pricing vs. ore-based metallics.  I don’t anticipate a major spike in scrap pricing, however, regional pressures may push some grades $10-20/gt higher in selective areas.”

So, we are hearing sideways to as much as up $10 or $20 per gross ton. If correct, this is a net positive for the flat rolled steel industry as firming scrap prices will help maintain steel prices.