With negotiations still ongoing this week, it appears ferrous scrap prices will see a big jump in March, as was widely expected. Steel Market Update sources reported that scrap pricing announced in Detroit today was up $70 per ton on prime grades and up $50 per ton on obsoletes. Other regions of the country are likely to follow suit. Higher scrap prices lend support to higher finished steel prices.
“These increases are being accepted by mills from the Midwest to the East Coast,” said one dealer in the Northeast. “Like previous increases, these are due to bad weather, low inbound flows, a hot export market and strong demand. It seems like a small victory for the sellers after initial offers from mills were much lower.”
Other mills will try to follow the lead of those in the Detroit area, but the busheling price may not hold up, said another SMU source. “This will be a good test of the strength of the market.”
With the export markets strengthening further, dealers have options, he noted. “Mills need scrap and are owed scrap from last month. Transportation is a big issue as well. In this market, I would rather overpay then underpay.”
The price of pig iron has strengthened dramatically, too, he added. “The last buys were at $550/MT CFR NOLA, which is up $40/MT, and the producers now have sold at even higher numbers. One Russian cargo was sold to the USA at $570/MT CFR.”
Tim TriplettRead more from Tim Triplett
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