June ferrous scrap outlook looks sideways to negative

SMU spoke with a trading source in Northern Ohio. He believes the June market will trade sideways. However, in July the market will rise since dealers will no longer be able to “eat the increased fuel charges.”

The reduced prices paid for obsolete scrap collection could drive down accessible tonnages, he thought.

Another trader in the Pittsburgh district mentioned that some grades may be weaker.

SMU spoke with an US East Coast export executive about the direction of the June market. He laughed at predictions the market on obsolescent grades will fall in June, citing a +80% melt rate.

He also offered his opinion that shredded scrap is now at a point where export prices have reached a par vs. domestic prices in the Ohio Valley and Central districts. This could mean less shredded could be available for interior mills if Turkish prices can start siphoning off significant tonnages. It has not happened yet.

A domestic mill source completely disagrees with this view. He said the volumes moving offshore from the US East Coast are nowhere near what they were five years ago. Since the US EAF steelmaking capacity has increased, more tons are moving inland. He thought this amounts to 5-6 million tons less exports. He added these extra tons are what prevented the scrap market in the US from rising during this period.

A quick check of US Government figures show that exports of ferrous scrap dropped from 17.91 million metric tons (mt) in 2021 to 12.1 million (mt) in 2025. These figures include exports for all US locations, but generally support the above statements.

He went on to say, “Unless export volumes creep back up soon, I think June is off on shredded scrap, but flat on primes.”

The source believes the supply and demand picture supports a drop in shredded scrap. However, he also said, “If we lose flow of material for the time being, we will pay more when the well dries up.”

SMU contacted a source in the Southern region who said he expects the markets in the South to trade sideways with the possible exception of HMS, which could weaken.

The demand situation is mixed for June. The largest buyer in his region has a good appetite, while several others in Alabama and Arkansas will buy less as they try to adjust their scrap inventories. He stated there have been few delivery interruptions lately and scrap is moving freely. At basically sideways prices, he projects scrap will be fairly easy to place. We could possibly hear some official purchases yet this week.

SMU contacted a mill buyer in the Texas/Southwest region who said the market is in an interesting position.

He continued, “The supply/demand picture would dictate a down market. However, I think some supply chain management and hedging are in play from a large mill group. They expect tons to get tighter as the summer heat sets in and want to control some of the tons going into the hotter months.”

Therefore, he believes a good strategy is to maintain price discipline today so mills could be in a position to secure scrap tonnages ahead of potentially tighter market conditions ahead. “Couple this with the idea that down money (for scrap) signals weakness in the marketplace and would bring pause to the new steel buyer market,” he added.

In the Chicago district, there is not too much chatter about the market. One source there said things look sideways. He also said one mill in Indiana issued May order cancellations but others have not. He also noted mills and foundries are asking for more busheling and prime grades.

“It would be hard to imagine consumers trying to lower price tags (on prime scrap),” he added.

Recall Chicago dropped $10 per gross ton (gt) last month on obsolete scrap and held busheling sideways.