US scrap tags sideways, but will tariffs on Brazil lift prices in August?

One scrap source was unsure the tariffs would stick.

“It certainly will help the market perception of primes, but the reality of Trump’s tariffs is total chaos,” the source said. “The chances of these tariffs being in place in 60 days is minor.” 

Another scrap source thought it could give scrap prices a bump in the near term, especially because the increase seemed “to come out of nowhere.”

“Over the last few years, these pig iron supply issues seem to have self-corrected over a period of months, so I imagine that this time won’t be much different,” the second scrap source said. 

Of course, there could be a number of new developments on the tariff front before August arrives.

SMU’s July scrap pricing stands at:

• Busheling at $410-440 per gross ton (gt), averaging $425/gt, unchanged from June.
• Shredded at $370-390/gt, averaging $380/gt, even with June.
• HMS at $315-345/gt, averaging $330/gt, equal to June.

Let’s take a look at how our SMU Scrap Survey respondents see the ferrous market shaping up over the next two months. Recall that these responses were taken before the market settled and the announcement of the Brazil tariff.

How do you see ferrous scrap pricing behaving over the next 60 days?

A majority (53%) of survey respondents expected the market to continue sideways in August. Meanwhile, a third (34%) believed the market would strengthen over the next two months, and 13% thought it would weaken.

Here’s what respondents had to say:

“Tariffs on imports … slow inbound flows … exports?”

“Could see some weakening.”

“Dealers were not able to place all of their tons in July.”

“Summer heat slows down the in-feed.”

“Tariffs may affect the market going forward.”

“Reports of global scrap shortages are a myth.”