Contributor: Stephen Miller

The US domestic scrap market for May is forming a lightly bullish consensus opinion among the seller community.

Imports of various iron and steelmaking raw materials are eligible. These include pig iron, direct-reduced iron (DRI)/hot-briquetted iron (HBI), iron ore pellets, and ferroalloys, to name a few.

The ferrous scrap export market from the US has been poised to rise further amid reluctance of their Turkish customers to increase prices beyond the recent bullish prices they paid earlier this month.

Pig iron availability in the US is in short supply, various sources reported to SMU. However, based upon figures for Q1'26, pig iron shipments from Ukraine and Brazil are at high levels.

There are several factors buttressing the ferrous scrap market against it seasonal fall in the spring months. We all know about the Iran War and the rise in fuel costs. Other factors include strong steelmaking activity, rising steel prices, lighter inbound scrap flows, and firm export markets.

The spread between domestic hot-rolled coil and prime scrap prices widened again in April, a trend that started back in September.

We look at market participant comments from this month's SMU Ferrous Scrap Survey.

After an active end to March in the Cross-Atlantic export trade, things have calmed down thus far in April.

SMU’s Current and Future Sentiment Indices for scrap rose in April, pulling even with each other for the first time, according to the latest data from our ferrous scrap survey.

The pig iron market in Brazil continues to rise, despite US scrap prices trading sideways to down for April.

The US scrap market has largely settled at prices most predicted in late March. The prevailing view then: shredded and other obsolete grades, like HMS, would drop $10-20 per gross ton (gt) despite higher transportation costs. And prime grades, like #1 busheling and bundles, would trade sideways thanks to better demand and static supply. This is essentially what has happened.

What impact could the war in Iran have on the steel raw materials supply chain and prices?

Winter is over now and the scrap landscape is looking a bit less challenging.

Turkish steelmakers entered the scrap market after returning from the Ramadan holiday.

The pig iron market in Brazil has been quiet lately. There have been few bids or offers made by market participants.

The bulk scrap export market into Turkey is starting to form after several weeks of inactivity.

Since the Supreme Court ruled the IEEPA (reciprocal) tariffs imposed by the Trump administration were illegal, the subject of refunds has been circulating. A lower court has ruled refunds are due to importers affected by these tariffs, which amounted to an estimated $166 billion.

Freight rates have remained high in the US and Northern Europe, and there has been little or no activity in the Mediterranean region since our last export update on March 10.

The weather is still influencing the recycled metals market as we head into spring, sources say.

The pig iron market in the Brazil-to-US trade flow is showing strength as supply concerns and increased logistical costs impact recent sales negotiations.

The state of the US export market for recycled ferrous scrap is in extreme flux due to events of the last 10 days.

SMU’s Current Sentiment Index for scrap inched up in March, according to the latest data from our ferrous scrap survey. Meanwhile, the Future Sentiment Index remained locked at the same level for the fourth consecutive month.

Broadly speaking, there should be enough scrap to go around. The question we should consider more urgently: Do regional dislocations - whether caused by tariffs, carbon regulations, weather, or conflict - allow scrap to go where mills need it most at a price they can afford?

The US domestic ferrous scrap buying for March shipment is wrapping up this week, with many sources reporting a sideways outcome.

The US scrap market is looking to emerge from a bad winter that has affected both inbound and outbound flows of material since December.

SMU has confirmed the US sale of 55,000 metric tons (mt) of pig iron at a price of $440/mt FOB South Brazil, according to an executive in the Brazilian trade.

The main discussions surrounding pig iron is the ruling by the US Supreme Courts that “reciprocal tariffs” are illegal.

The spread between domestic hot-rolled coil and prime scrap prices widened slightly in February. It has been trending in that direction since October.

The export scrap market from both North America and Europe has quieted down over the last week.

US ferrous scrap prices rise in February.