We learned late this afternoon that two domestic steel mills are offering to pay higher prices for shredded scrap from east coast dealers. Shredded scrap buy offers have been made at $180-$185 per gross ton up $10 to $15 per gross ton higher than November numbers (and higher than October numbers since November prices moved sideways to up slightly on the east coast).
One of our scrap contacts told us, “Ferrous exports off the east coast, in both bulk and container, have been and continue to be at a price level that will keep scrap from moving off the coast and into the domestic market. This price relationship will last throughout the year.”
Mike Marley, of World Steel Dynamics, told his followers, “The latest Turkish buying binge included 12 or 13 bulk cargoes bought from U.S. shippers.”
Our source told us that Busheling prices will not rebound in December as it is being generated in large quantities by automotive manufacturers and other manufacturing operations. Shred and other obsolete grades, on the other hand, are becoming “tight” due to low buy prices by the scrap dealers to their smaller suppliers. This has slowed down collections of obsolete grades of scrap.
We are also being told that in the Midwest, Mid-Atlantic markets the expectation is for scrap prices to move higher on all grades but Busheling.
Any tightening of the scrap market (higher prices) combined with reductions in steel supply through the idling of Granite City (USS), Ashland (AK Steel) and the squeeze on foreign due to trade suits should put the mills in a position to raise flat rolled prices in the coming weeks.
We will have more about the actual negotiations and December settlements between the domestic steel mills and their scrap suppliers late next week.
John PackardRead more from John Packard
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