Hoffman on scrap: The March outlook

The news in the West was that a mill in the Rocky Mountain region made a significant reduction in their usual purchase program, while still another small mill in the region also apparently reduced their buying program for February. According to one source, this combination “left tonnage everywhere” and caught many dealers in the Rocky Mountain region and Southwest flat-footed. They were scrambling to sell their tons into Texas, Oklahoma, and other points east. This pushed the otherwise sideways Texas market down by $20 – 25 per gross ton (gt) depending on the grade, according to numerous sources. Settled prices in Texas from one large supplier are $390 gtd HMS, $425 plate and structurals (PNS), and $430 for shred delivered to local mills – a $20 to $25 decline from Jan.

The big question on everyone’s mind is if, or for how long, the Rocky Mountain mill might be impacted by reduced purchase volumes? This affects both the Southwestern/Texas domestic markets and the West Coast export markets. Scrap flows that were going from California eastward can no longer move east due to the overflow of scrap from the Rocky Mountain/Southwest regions filling those homes.