Scrap Prices North America

April Scrap Prices Expected to Jump Again on Pig Iron Scarcity

Written by Brett Linton


Steel Market Update sources expect ferrous scrap prices to rise yet again in April, with obsolete grades potentially up $50-$100 per gross ton over March and busheling up $120-$200 per gross ton.

The big anticipated gains in April follow record price increases in March due to the Ukraine-Russia war.

steel scrap“I have to say, this is one of the craziest – if not the craziest market – I have dealt with in my career,” one source said.

“The US scrap market is on the verge of complete chaos. … The demand for scrap worldwide has sent the market toward the stratosphere,” said another.

The primary force driving the ferrous scrap market higher is pig iron, or the lack of it, market participants agreed.

“Some mills will need to substitute pig with prime in April, the result being price increases for prime grades,” one scrap exec in the Northeast said. Another commented, “the pig iron markets have already realized the upward swing in pricing… There is precious little to buy at this point at any down-to-earth price.”

In addition to the lack of pig iron, inconsistent scrap feedstock flows are also supporting higher prices.

“There is a shrinking factory scrap generation since the automakers are still reducing production due to the chip shortage. No one is sitting on any busheling inventory,” said one dealer.

Busheling, or prime scrap, is a byproduct of manufacturing processes such as automotive stamping.

And it’s not just prime that is in short supply.

“Dealers have cleaned out the back 40 acres to sell into last month’s purchases, and they only have left the inbound flows, which are winter weather restricted,” said another dealer. “It’s questionable if the springtime thaw will improve flows enough to prevent shredded and HMS from rising triple digits again.”

Mill scrap surcharges are also expected to increase in April, with a source noting, “mills are already adding scrap surcharges, and it is anticipated that similar increases will happen in April.”

These comments put potential April prices in the low- to mid-$800s per ton for prime grades and in the mid- to high-$600s per ton for obsoletes.

Recall that from February to March, scrap prices saw the largest monthly increase in our history, with shredded scrap trading in March at around $600/GT and prime scrap at $700/GT – up by $125-175 over February. Prior to that, prices had declined in January and February.

You can chart out scrap prices as far back as January 2007 with SMU’s interatcive pricing tool.

By Brett Linton, Brett@SteelMarketUpdate.com

Brett Linton

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