Ferrous Scrap
Could we be looking at a weakness in June prices?
Written by Stephen Miller
May 29, 2024
The chatter about the June ferrous scrap market has been noticeably muted as we come off the Memorial Day weekend. However, those who RMU have spoken to are not confident prices will hold at May levels, which saw prime scrap trade sideways and obsolescent grades drop $10 per gross ton (gt) to $20/gt.
The best illustration of this was conversations RMU had with our sources in the Midwest. One source thinks the market is trending downward on the basis of reduced demand. He said the melting program at USS-Gary Works and the other Cleveland-Cliffs mills in the Chicago district “will be less than May, and May was pretty bad.”
The source also that noted NLMK in Portage, Ind., will not be buying scrap in June. Normally, NLMK would purchase 30,000-35,000 gt per month. He also noted Charter Steel in Wisconsin has an announced outage from June 18-July 21. Canada’s Algoma Steel’s program will not be strong, either. This doesn’t leave many EAFs in the Chicago region to take up the slack. The only possibility is Nucor Kankakee, but the chances of that happening are slim.
He revealed that he has seen a lack of scrap generation on the part of his larger industrial accounts. This may indicate that the manufacturing sector could be slowing down.
We spoke with a buyer in the Great Lakes region who said demand in his district “is relatively consistent with a few additional outages scheduled for June.” He further added, scrap flows are enough to meet the current demand picture.
All this information points to weakness in June. As the price of HRC tries to find a bottom, the mills collectively are unlikely to show the scrap industry any mercy. So, the market could easily drop $20/gt and even more.
Stephen Miller
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