Ferrous Scrap
February scrap tags seen up $20 after Mexico, Canada tariff reprieve
Written by Stephen Miller
February 6, 2025
The reprieve for Canadian and Mexican tariffs this week has left some uncertainty for the February scrap market, with some sources pointing towards a $20-per-gross-ton (gt) increase.
The tariff implementation received a commutation rather than a full pardon from President Trump. Both Mexico and Canada offered up enough proactivity on immigration and drug enforcement to push the tariffs back by 30 days.
It is only a month, but most players do not think tariffs will rear their heads again that soon. Also, it remains to be seen if the Chinese tariffs, at 10%, will be active for very long.
February scrap settle?
So, with this situation now behind us, what is the February scrap market going to do? The general feeling is an increase of $20/gt.
There is also some uncertainty this will be enough to draw sufficient material in a scrap-short, underpriced and logistically challenged mid-winter marketplace.
There are several organizations predicting an increase of $30-50/gt, while a few steelmakers are saying they would rather cut back production than pay more that up $20 for steel scrap.
Export market
The export market off the East Coast has been weak lately. But recent deals in the Eurozone have ticked up $4-7 per metric ton (mt).
US-based export terminals are hesitant to offer scrap to Turkey or elsewhere until after the February domestic settlements. This is a very large hint the exporters are considering moving scrap inland again this month.
If this were to change, things could get interesting on this side of the Atlantic.
The trade was expecting the mills to enter the market this week. However, they seem hesitant to dip their toes in as of press time.
Stephen Miller
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