Ferrous Scrap Prices Surprise to the Low Side in March

He puts March scrap prices at $280-290/GTD for Shred, $265-285 for P/S and $295-310 for Bush.

“There was some expectation of a stronger market given a recovery in export prices during February and an attempted $40 per ton increase in sheet steel prices by mills, but few export deals were done towards the end of the month and it is looking less and less likely that mills will get the entirety of that increase. For now, it seems like at least some dealers are holding out to see if they can secure prices a little higher than sideways,” said CRU Senior Analyst Ryan McKinley.

He added: “Structurally, the market has changed little in March compared to February. While capacity utilization/steel production is still strong, the mild winter this year hasn’t impacted transportation or scrap collection as much as usual. March demand is a little higher than February given that it is a longer month. While this likely provided a little support for prime grades, the gap between #1 busheling and shredded scrap has been abnormally narrow for quite some time now and was going to expand again at some point.”

“The March market is not nearly as strong as we were expecting,” agreed another scrap executive. “Demand is much better the further west one travels from the East Coast than along the coast itself and down south. Disruptions on the river system are making material availability tight there. And dealers’ yard inventories are not very large. But export demand is tepid because of global uncertainty, and that is making sellers along the coast more willing to make deals with domestic consumers. Where we go from here is really dependent on how much more uncertainty there is overseas and what happens with the spread of the virus in the U.S. Flows may not improve dramatically over the course of March without the big price increase that most people were expecting, but they won’t get worse either and mill buyers know that.” 

Pig Iron Market

The last major buy of pig iron was concluded at $363/MT CFR, reported another SMU source. This price was $16 higher than a cargo sold from Russia at $347/MT in late February. “In the merchant pig iron sector, lack of supply of low-phos material is driving prices up. The increase is also a reaction to the increased scrap prices in Turkey over the last month.”