Domestic ferrous scrap market down as trading wraps up

Southeast

Mills in this district are almost finished with their procurement process, with prices decreasing as above. Most mills have had no trouble in securing their needed tonnages.  SMU spoke with a large supplier who said in regard to this latest plunge in prices: “It looks like we’re at the bottom.”

Chicago and Midwest

These districts have also entered the market at down $30/gt for busheling, with a few buyers pushing it down another $10 as the buying went on and they sensed weakness. Shredded and other cut grades went down $40/gt, according to a source in this region.

When SMU asked if we are at the bottom, he said he was concerned the market could fall further in the coming months.

His reasoning is there are more tonnages of scrap from remote locations needing a home. 

He pointed to the West Coast and adjacent states, which are tied to the export markets there.

The extreme weakness of the Taiwan and Southeast Asian export markets has lowered scrap price expectations to where western dealers are selling into mills in the Midwest.

Also, US East Coast exporters and their key suppliers are continuing to offer scrap to mills in Ohio, Michigan, and Western Pennsylvania, rather than trying to export it to Turkey. This is despite the recent cargoes sold this week at prices which increased $10-15 per metric ton.

Northern Ohio/Michigan

This district has reported Cleveland area mills have also both at down $30/-40/gt on busheling and shredded, respectively.

However, another mill in the region is seeking to drop shredded prices by $50/gt.

The Michigan district is active at the down $30-40/gt level.

In general, there some dislocations of scrap in the marketplace that could keep things soft going into the summer. There is no consensus about the market’s direction other than it is not going up.