Ferrous scrap markets react to tariff reprieves

Commerce Secretary Lutnick had spoken in a recent interview with CNBC about the decision to exempt all USMCA-compliant imports from our neighbors, North and South. It has now been confirmed blanket tariffs on imports from Mexico and Canada have been suspended for 30 days.

Of course, this will affect the ferrous scrap markets. If there are no tariffs in March on imports from Canada or Mexico, then procurement of scrap will be easier and less expensive, particularly on prime industrial grades.

The domestic supply chain for obsolescent material seems to have recovered more readily than the trade predicted last month.

Midwest

Sources have told SMU, prices for these grades may be in the $20-30 per-gross-ton (gt) range for increases over February. These numbers are being put to the test in the northern Midwest districts as steel mill-owned brokers are quoting up $20/gt, claiming they can bring material from the West Coast into the Midwest at this price.

The export market for shredded there has been severely depressed due to weakness is the export markets in Asia. It is unclear at this time if these pricing are being accepted.

Ohio

In the Ohio markets, it’s reported mills are looking at going up $30-40/gt. It looks like the market will settle there on Friday.

South

In the Southern districts, there have been some sales of plate and structural (P&S) scrap at $15-20/gt over tags in February. The February prices in the Southeastern districts ranged between $415-420/gt for this grade.

SMU spoke with a source in the Southeast who said there have not yet been any purchases of shredded or busheling officially.

“The markets will not settle until Friday,” he added.

When asked where the market in the South will settle, he predicted busheling and shredded up $30/gt and HMS and P&S up $20/gt.

Export market

There was a transaction concluded on Thursday in the export market, which saw a US cargo of HMS sold to Turkey at an 80/20 equivalent price of $374 per metric ton (mt) CFR with a component of shredded scrap at $393.50. This is an increase of about 12 MT over the last US cargo.

Cargoes from Northern Europe to Turkey increased on the most recent sale, as well.

It should be noted in our recent scrap survey a majority of respondents across all sectors said they thought scrap prices for March would be increasing in the $20-30/gt range this month.

So, in a couple of words from one of our sources:“Stay tuned.”