Ferrous scrap prices rose by $20/GT for prime grades, but were unchanged for obsoletes, in trading for July. Prime supplies were influenced by the slowdown in automotive production, while obsolete prices reflect stable export demand.
Sources tell Steel Market Update that prices in the Ohio Valley settled around $505-514/GT for shred, $500-510/GT for plate and $670-680/GT for busheling.
“Overall prices were sideways for obsoletes and up $20 on primes. With a flat export market and robust inbound scrap flows, dealers accepted these levels for July, even though they were below expectations for most,” said a dealer in the Northeast. “Prime scrap continued its climb because of short supply and limited alternatives for most mills. Looking forward inbound flows into the scrap yards will take on greater significance, as export looks stable through August.”
“Since last fall the scrap market moves, aside from some of the prime scrap increases, have followed export pricing. As that was basically stable over the course of June, so too were U.S. domestic prices in the July trade,” said another scrap executive. “From what we see, export prices should remain relatively stable over the next month. Demand for imported steel into Asia is getting a little better thanks to Chinese production curbs. European scrap is tight. And in the U.S., flows are better, but inventories are not deep. Big picture, not a lot of price change expected in the foreseeable future.”
Prime scrap is the exception as it continues to be plagued by short supplies, he added. Prime prices could push incrementally higher in the coming months as demand improves, though increased auto production will generate more scrap supply and ease the upward pressure on prime prices. “Mills are really just competing for the limited supply of prime that there is right now,” he added.
Pig iron prices may have eased a bit, according to one SMU source. “We heard the last sale for Russian BPI before the duty sets in was at $625/MT CFR, down from $645 last week and $660 last month.”
Weakness in pig iron pricing stems from an upcoming export tax in Russia, explained CRU Senior Analyst Ryan McKinley. Regulators there are looking to keep raw material and metal prices in check, and have put this tariff in place effective Aug. 1 (ending Jan. 1, 2022). Before this takes effect, Russian pig iron sellers are pushing as much material as they can into the international market, and this higher availability is what is driving prices lower. “Interestingly, it appears the premium that pig iron tends to hold over #1 busheling has now inverted when calculating prices on a metric tonne basis in the U.S.,” he added.
By Tim Triplett, Tim@SteelMarketUpdate.com
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