CRU: Global scrap prices diverge even as US market holds flat

In the US, scrap prices settled sideways for the fourth consecutive month. This was a result of a balanced market where supply from scrapyards met steady demand from mills. News that Brazilian pig iron would not be subjected to a 50% tariff, instead remaining at 10%, eased concerns and kept upward pressure off prime grades. While the availability of industrial scrap turnings was limited, obsolete grades and primes were sufficiently available. Finished steel prices were varied, with hot-rolled (HR) coil softening due to sluggish demand, while long product prices rose as tariffs made imports more expensive, boosting domestic mill demand. 

In Brazil, the domestic scrap price saw a m/m increase as local mills raised prices to encourage collection. This was a response to low collection rates in previous months and a need to replenish stocks, even as mills faced a challenging domestic market with slow growth and higher steel imports.

The European scrap market saw a slight increase in prices as mills began to procure material in anticipation of restarting production after the summer holiday period. Despite this, market confidence remained low, with some mills extending shutdowns due to slim margins. Nevertheless, competition among the buyers for scrap purchases was strong, though suppliers were cautious not to oversell at low prices, expecting demand to pick up after the holidays.

In Turkey, scrap import prices gradually increased, supported by an uptrend in local finished steel prices backed by higher steel export prices in China. However, demand remained tepid as mills purchased material only on need basis due to weak finished steel sales and sufficient existing inventories. This kept prices from rising further.

Russia experienced a downward trend in domestic A3 scrap prices in most regions, with significant m/m price drops in the Urals and South. This was driven by a weak finished steel market, particularly in the construction sector. In contrast, prices in the Central region remained stable due to stronger material demand.

The Asia-Pacific region presented a mixed picture. Chinese scrap prices surged due to policy-driven optimism and increased consumption, while the Japanese scrap prices rose due to supply constraints because of lower scrap generation. Conversely, Bangladesh saw a price decrease to a four-year low as demand weakened due to the rainy season and mills preferred cheaper imports from Northeast Asia. Vietnam’s import scrap prices increased, buoyed by positive sentiment from the Chinese market, despite a monsoon-related slowdown in domestic demand.

Pig iron prices remained stable in the US and Brazil, as buyers returned to the market after the tariff clarification on Brazilian imports. In Europe, however, prices declined as summer maintenance periods for mills impacted demand for ore-based metallics. CIS pig iron export prices also continued to face pressure from oversupply.

The analysis above was first published by CRU. To learn about CRU’s global commodities research and analysis services, visit www.crugroup.com.