July Scrap Market Predicted To Be Sideways

“The July market expectations are soft sideways,” one scrap source told SMU. “A stable export market combined with reduced inbound scrap flows should halt the recent run of large price drops.”

He said that inbound flows of scrap are already slowing, “owing to a three-digit drop over past 60-70 days.” The source added that the coming summer months will only exacerbate this situation.

Another source is also seeing slowing scrap flows.

“Scrap flows have waned a bit due to the summer season and the large drop in prices over the last two months,” the second source said.  He commented that export prices are still hovering at the same levels seen over the month after a reasonably strong uptick.

The second source said that the prevailing thought among scrap suppliers is that demand for scrap is fairly strong. For July prices, he said, “Looks like sideways in general with some local bumps and bruises.”

Regionally, he said that with the Illinois River locks still under repair, markets like Chicago could still buy scrap possibly down.

As for individual grades, he commented that with pig iron pricing adjusting downward—at least temporarily—we can’t expect prime grades to increase, but it’s possible obsolescent grades could show some upward movement.

According to SMU’s most recent survey data, 54% of respondents thought prime scrap prices would be sideways in July, with 45% predicting they would fall.

When viewing the market in general, a third source says it “seems reasonably stable.”

He noted that the Turkish Lira has weakened and Turkish mill buy programs have not been very active.

“Despite that, those export prices are down only $10 from the previous sales several weeks ago,” the third source said. “Flows have slowed a bit and export docks don’t have much room if any to lower their buying prices.”

He doesn’t expect the domestic market to trade until after the July 4^th holiday, “so we are still a week away.”

SMU’s June tags stood at:

• Busheling at $440-480 per gross ton, averaging $460, off $50 from the previous month.

• Shredded at $390-420 per gross ton, averaging $405, down $50 from the previous month.

• HMS at $290-320 per gross ton, averaging $305, dropping $30 from the previous month.