Ferrous scrap tags increase ~$20/gt in January

“There were probably some specific deals for prime grades that were up $25-30 based on tonnage and where the material was headed,” one source said.

SMU’s January scrap pricing stands at:

• Busheling at $400-425 per gross ton (gt), averaging $412.50/gt, up $20 from December
• Shredded at $375-400/gt, averaging $387.50/gt, up $17.50 from December
• HMS at $320-360/gt, averaging $340.00/gt, up $25.00 from December

As to what was behind the jump, the first source said it was “mainly a restocking rally, with a lid on the upside due to ongoing export price weakness.”

“Indeed, new export sales have returned to the low $340s CIF for 80/20 grade,” he noted. 

A second source cited factors causing the increase such as mills “replenishing low year-end inventories, and tight scrap supply brought on by lower prices and seasonal weather.”    

February outlook

Sideways for February, or modest gains, seemed to be the general consensus.

US demand might be improving. But it’s incremental at best. So don’t expect a rally over the next 60 days, the first source said.

“February at this point looks stable. It could be either side of sideways depending on January flows (winter weather has returned for the first time in several years), export pricing, and incremental US demand,” he concluded.

The second source agreed. “It is our expectation that these factors will still be present in February, resulting in at least sideways pricing.”

A third source said some mills didn’t obtain all the scrap they wanted at a $20 increase and had to make deals above this price to fill in. “With winter affecting logistics, the February market is sideways at worst and likely higher,” he added.