There is growing hope that the US scrap market has bottomed, according to industry sources. The steep price declines in March may have ushered in a floor because dealers say their stocks are a bit depleted. Their concern: that the flow of obsoletes could be cut severely with any further drop in prices. Is this wishful thinking, or do the fundamentals support the prediction of a market bottom? Let’s take a look!
Prices for pig iron in Brazil have increased despite efforts by US-based buyers to lower them.
As the month of March goes into the second half, the scrap community is trying to cope with the large drop in ferrous scrap earlier this month.
The ferrous scrap market experienced a sharp decline for March shipments. Prime scrap fell $60-70 per gross ton (gt) while shredded and other obsolete grades declined $40-50/gt. It seems these prices were accepted in the trade by dealers across the continent.
A Detroit area steelmaker this morning announced its offers for scrap for March scrap shipments. The drop in its offer prices were larger than most industry observes forecasted, especially for shredded scrap. Many in the scrap community had predicted that prime scrap would drop $40-50 per gross ton (gt) with shredded only down $30-40/gt. But other market participants were skeptical about these predictions given bearishness in ferrous markets, both domestically and abroad.
The March outlook for most ferrous products is trending down faster than most participants thought as recently as a week ago.
The Mid-American ISRI Chapter held its annual meeting in St. Louis this month. Over the years, this event has become a “must attend” for the scrap community nationwide.
The scrap export market has demonstrated resiliency so far this year from the US East Coast. This strength has mainly come from the Turkish market. Despite weakening orders for rebar in their domestic market, imported scrap prices have held up until the last several days. The US West Coast is not as active, but there are orders in South Asia and in South America that are keeping things afloat.
The market for February scrap shipments has largely been settled. The prices for scrap across the country went down very modestly. The price tags on #1 Busheling and bundles went down $10 per gross ton (gt) in most districts. The exceptions were Chicago and Detroit, which fell $30/gt, to $480 and $475, respectively.
The pig iron market has risen in recent months from the high $390s per metric ton (mt) last fall to $490/mt for Brazilian material and a bit more for Ukrainian product - for an overall average of $495/mt CFR.
The state of the US scrap market is not very well understood, according to the dealer trade. It seems steelmakers in several regions are still looking to buy scrap, several sources told SMU.
When I started in the scrap business many years ago as a rookie trader in Luria’s Cleveland office, I saw an industry composed of family-owned businesses stretching across a great industrial nation.
For two consecutive months, the initial scrap prices didn’t attract the amount of scrap that mills needed. A Detroit area mill came in at $460 per gross ton (gt) for busheling, which was down $50 from last month and down $20 on shredded and plate and structurals (P&S). But I guess they did not know at the time another mill in the district bought scrap sideways. Needless to say, that order filled right away. SMU could not find any supplier who sold at down $50.
A Detroit-area mill entered the scrap market on Friday afternoon with the following offers: The Chicago area followed suit: Mills in the Great Lakes region sensed there was ample supply of most grades. Also, they all bought heavily last month and so had sufficient inventories to make this move, market participants said. Still, the move surprised […]
After a brief decline in the price of scrap for the Turkish market, which peaked in December at approximately $424 per metric ton (mt) for HMS 80/20, the market has bottomed at $405/mt on cargoes from Europe.
As we look back at the scrap market for 2023, it basically followed its normal seasonal pattern. Most of the disruptive geopolitical events that riled ferrous raw materials occurred in 2022. So, with those things out of the way—or settling down at least for now—2023 resumed its normal pattern.
Over the last two decades, the role of the scrap broker has been diminished in favor of steel mills purchasing their scrap requirements directly from scrap dealers.
The prices for all grades of pig iron have dramatically risen since SMU’s last report from Nov. 18.
The export market for ferrous scrap has been strengthening over the last month by a sizable margin.
The importation of basic pig iron has allowed EAF steelmakers to implement thin-slab casting technology to make drawing-quality flat-rolled sheet over the last 30 years.
The iron and steel foundry industries consume about 17% of the ferrous scrap in the US each year. They purchase several grades of scrap in common with steelmakers, such as shredded and turnings. But, most of the grades are much more restrictive than what larger mills require.
The announcement that Republic Steel in Canton, Ohio, is going to permanently cease operations disappointed many scrap suppliers in Ohio and Pennsylvania.
The ferrous export market in the US has experienced several geopolitical events and natural disasters during 2023.
As the ferrous scrap market in the US enters the home stretch for 2023, it faces an array of issues and uncertainties.
The pig iron trade is an important element to the US steel and foundry industry.
Some of the movements in scrap and pig iron pricing over the past 18-24 months have been quite drastic.
The US scrap market for October is a bit unsettled as the UAW strike against the Big Three automotive companies has expanded and shows scant signs of an imminent settlement.