Category: Raw Materials

After a considerable wait, the market for ferrous scrap for May shipment has started to form.

Turkish scrap import prices were stable last week. CRU’s assessment for HMS1/2 80:20 and shredded was unchanged at $384 per metric ton (mt) CFR and $408/mt, respectively.

As we approach “buy week,” a term industry veterans use to refer to steel mill scrap buying time and an excuse to remain in the office, we have seen a variety of slants on the May market.

If successful in its overtures to Anglo American, BHP will create the world’s largest diversified miner by a country mile. The rationale for this merger is scale and in mining, size matters. 

The steel market appears to be finding a new, higher normal with the shocks of the pandemic and the Ukraine in the rearview mirror. The good news: a more profitable and consolidated post-Covid US steel industry has been able to invest in operations. That includes efforts to decarbonize. The bad news: That “new normal” could be tested. Because it’s not just domestic sheet prices that have been volatile. Geopolitics are too.

Does the price of ferrous scrap depend on the price of finished steel product? And how much of an influence do billet and slab prices have on scrap prices?

For those of you old enough to remember The King and I, the April scrap market seems to be a puzzlement. While it is now clear that everything went sideways, one could clearly make an argument for prices to have been down.

Over the last several years, I have noticed widening spreads between #1 Heavy Melting Steel (ISRI 201) and Shredded (ISRI 210,211), as well as Plate & Structural (ISRI 232).

April scrap prices came in sideways in the US, sources told SMU.

Low manufacturing activity and higher interest rates took a toll on Radius Recycling’s profits during the Oregon-based company’s most recent quarter. Radius reported a net loss of $34 million, or $1.19 per share, during its fiscal second quarter. In the previous quarter, Radius saw a net loss of $18 million, or 64 cents per share.

Several large buyers in the North came into the market on a sideways basis from prices paid in March. The development comes after recent speculation about what prices US-based steelmakers would pay for scrap for April shipments.

On the eve of the April ferrous scrap buy, there is no firm consensus on the market’s direction. The safe predictions are “soft” sideways to “strong” sideways. That may mean down $10 per gross ton (gt) to up $10/gt.

There is growing hope that the US scrap market has bottomed, according to industry sources. The steep price declines in March may have ushered in a floor because dealers say their stocks are a bit depleted. Their concern: that the flow of obsoletes could be cut severely with any further drop in prices. Is this wishful thinking, or do the fundamentals support the prediction of a market bottom? Let’s take a look!

Numerous mid-sized export yards in California and in Baja Mexico had little to no inventory on the ground last week because most had sold forward in the falling March market. Looking to secure their margins, they dropped prices across the scale. That resulted in lower-than-normal flows. “I’m sold out through mid-April and even longer if the flow doesn’t pick up” one yard owner said. That turned out to be the position of numerous West Coast suppliers.

Prices for pig iron in Brazil have increased despite efforts by US-based buyers to lower them. 

As the month of March goes into the second half, the scrap community is trying to cope with the large drop in ferrous scrap earlier this month.

The spread between hot-rolled coil (HRC) and prime scrap prices has narrowed for the third consecutive month in March, according to SMU’s most recent pricing data.

The ferrous scrap market experienced a sharp decline for March shipments. Prime scrap fell $60-70 per gross ton (gt) while shredded and other obsolete grades declined $40-50/gt. It seems these prices were accepted in the trade by dealers across the continent.

US ferrous scrap prices fell steeply in March for HMS, shredded, and prime scrap, sources told SMU.

As I see it, the market looked to be a perfect storm for consumers this month while two large steel mills tried to put a floor on hot-rolled coil (HRC). One source speculated that “flat rolled mills coordinated their downtime and will take out 250,000 tons of capacity in April,” which made them attempt to put a bottom on flat-rolled product.

A Detroit area steelmaker this morning announced its offers for scrap for March scrap shipments. The drop in its offer prices were larger than most industry observes forecasted, especially for shredded scrap. Many in the scrap community had predicted that prime scrap would drop $40-50 per gross ton (gt) with shredded only down $30-40/gt. But other market participants were skeptical about these predictions given bearishness in ferrous markets, both domestically and abroad.

The strong resilience of iron ore prices has come to an end with the weak steel performance worldwide and significantly improved iron ore availability in China.

The news in the West was that a mill in the Rocky Mountain region made a significant reduction in their usual purchase program, while still another small mill in the region also apparently reduced their buying program for February.

The March outlook for most ferrous products is trending down faster than most participants thought as recently as a week ago.

In the period between mid-February and mid-March, CRU forecasts global demand for steelmaking raw materials to change little from the previous month,but buying activity will improve towards the end of next month

The Mid-American ISRI Chapter held its annual meeting in St. Louis this month. Over the years, this event has become a “must attend” for the scrap community nationwide.

Having just attended the historically significant ISRI Mid-America Chapter Consumers Night Banquet in St. Louis and waiting for my delayed flight, it seemed I had the perfect opportunity to inform the industry of a few items that came out while wheeling and dealing in the beautiful Union Train Station Hotel. For the West Coast export […]

While seaborne trade has been challenging due to weak global steel production, demand for ferrous scrap in the US remains strong, according to Sims Ltd.

The CRUmpi declined by 1.7% month over month (m/m) to 325.2 in February, compared to a 4.3% m/m increase in February 2023.

The scrap export market has demonstrated resiliency so far this year from the US East Coast. This strength has mainly come from the Turkish market. Despite weakening orders for rebar in their domestic market, imported scrap prices have held up until the last several days. The US West Coast is not as active, but there are orders in South Asia and in South America that are keeping things afloat.