Contributor: Stephen Miller

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.

Strategic Resources also discussed its project in Quebec, which will include a 4-million-ton/year DRI-quality iron ore pelletizer. It also plans to build a plant to produce DRI, then convert it to pig iron in an EAF.

There has been some recent activity of exports of basic pig iron from Brazil. Sources there agree on the activity but diverge on the pricing. What is new to the market in Brazil is the buying interest from the European Union, in particularly, Italy.

Sims Ltd. said on Monday it has acquired the assets of Tri Coastal Trading (TCT), Houston, for $66.5 million in cash.

SMU’s Current Sentiment Index for scrap jumped again in February, according to the latest data from our ferrous scrap survey. And the Future Sentiment Index remained the same for the third consecutive month.

SMU's ferrous scrap survey celebrates its one-year anniversary this month.

The US domestic scrap market is largely settled on February pricing. Despite poor weather conditions that have been wreaking havoc on scrap flows and deliveries to consumers, the pricing initially agreed between dealers and steelmakers has been fairly conservative.

The export market from the US and Canada has held firm, while slightly strengthening ahead of the domestic buying for February shipment.

The pig iron market has entered an upward phase now that ferrous scrap in both Europe and North America has also been increasing in price.

The US scrap market has come under pressure due to the extremely debilitating winter weather across the eastern half of the country.

The Italian authorities have seized a Russian cargo of hot-briquetted-iron (HBI) for violating European sanctions on Russian ferrous imports, according to media reports.

Speculation has already begun on what February has in store for the US scrap market after it rose $20-30 per gross ton (gt) in January,

The export markets in the Mediterranean Basin have shown firmness over the last month and have started to build in the first half of January.

The price spread between domestic hot-rolled coil and prime scrap widened for a fourth consecutive month in January, based on SMU’s most recent pricing data.

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The imported basic pig iron market has shown upward price movement over the last week.

The formation of the domestic scrap market for January shipments is underway and only partially settled as of this article's publication. The main point of contention is the price of #1 busheling and bundles.

There is disagreement over whether prices will increase meaningfully going into the new year. Prices did see a small increase in December, but several sources SMU has contacted have told us they are hearing price rises may be limited compared to past years.