US June Scrap Prices Seen Sideways to Lower on Low Steel Demand, Reduced Imports
Friday, 24 May 2024 19:53:05 (GMT+3) San Diego
US scrap markets for June are now seen sideways to $10-$20/nt ($11-$22/mt) lower compared with May scrap settles, as slack domestic steel demand continues, even as monthly steel scrap imports into the US from the world showed a monthly decline, industry data shows.
This week's June buy cycle market call differs from this past week when the expectation for June was for prices to settle sideways to May, market insiders told SteelOrbis.
"Overall, US Midwest (spot market) scrap is flat to down from prices seen in early May," a scrap trader told SteelOrbis. "We're seeing slack (steel) demand and very plentiful supply," he continued, "For June, the outlook we're now hearing is that people are leaning sideways to lower."
Insiders say that the combination of continued scant domestic US steel demand and flat to lower US finished steel prices are making the movement of imported scrap from the world oftentimes noncompetitive.
According to the International Trade Administration, imports of steel scrap into the US from the world at the end of March 2024, (the nearest month for which data was currently available), was down 8.3% to 1,204,671 mt from 1,314,121 mt at the end of the equivalent month in 2023. To be fair, yearly comparisons were better, with end-2023 scrap imports posting at 5, 125,399 mt, 7.84% higher than end-2022 4,753,548 mt levels.
While the year-on-year scrap import comparisons were up, market insiders caution yearly comparison data was recorded at a time when US steel prices were considerably higher and the movement of international scrap shipments more competitive on a delivered price basis.
The move from a flat-to-May to a sideways-to-lower June scrap call also comes despite the first weekly price increase from steel producer Nucor since the beginning of April. The steel maker increased its Consumer Spot Price (CSP) for hot-rolled coils from $760/nt ($838/mt) to $770/nt ($849/mt), a 1.3% weekly increase.
Because the price increase comes at a time when spot market HRC price levels continue flat to down, SteelOrbis market insiders caution the move likely was an attempt by the steel maker to establish a price floor to prevent further HRC price declines. "The lower scrap values that we're seeing doesn't bode well for the price increase at Nucor," a contact told SteelOrbis following Monday's CSP price increase. "The market overall is still flat with most prices unchanged to down."
With lower scrap values largely determining the value of finished steel, SteelOrbis market contacts expect little in the way of substantial price increases in the near future. US Domestic containerized shredded scrap declined $10/nt ($11/mt) this week to $390/nt ($430/mt), market insiders told SteelOrbis, while other grades were largely flat to week-earlier levels.
US Rebar Prices Flat to Higher Amid Price Uncertainty and Scant Demand
Thursday, 23 May 2024 21:00:25 (GMT+3) San Diego
US domestic rebar prices were reported "largely stable to higher" this week even as low local demand continued and cheaper imports were not expected to displace "aggressive "domestic steel mill pricing schemes aimed at maintaining cash flows and market share, market insiders told SteelOrbis this week.
Stable to slightly higher end-week pricing follows this past week, when talk of low continued mid-month demand and the lack of a spring "construction season" dominated conversations, prompting some spot market values, especially the US East Coast, to move sharply lower on the week. Midwest domestic rebar spot prices are assessed $1.00 cwt ($22.05/mt of $20.00/nt) higher at $40.00-$41.00 cwt ex-mill ($882 to $904/mt or $800-$820/nt) against previous assessments at $38.00-$41.00 cwt ($838-$904/mt or $760-$820/nt). Following last week's nearly 11% price slump on the US East Coast, this week's price increase represents the first price reversal in two weeks, when prices averaged $42.50-$43.50 cwt. ($937-$959/mt or $850-$870/nt) ex-mill.
"Domestic rebar values are largely stable to numbers we saw this past week," said one Midwest rebar market insider. "There's still not a lot of imports coming into the US Gulf because of low domestic pricing, though those that can buy substantial amounts are buying imports at $37.00-$38.00 cwt ($816-$838/mt or $740-$760/nt) to keep themselves active."
"Rebar prices remain stable with uncertainty into the future," said another US Gulf Coast-based steel market insider commenting on his view of "scant" weekly trade. "We're hearing now that June (shredded) scrap is expected to come in sideways to $10-$20/mt lower."
At last report, US East Coast rebar pricing regained all of the previous week's decline, posting a $2.00 cwt increase ($44.00/mt or $40/nt) to $39.00-$41.00 cwt ($860-$904/mt or $780-$820/nt) versus previous assessments at $36.00-$40.00 cwt ($794-$882/mt or $720-$800/nt). Imports are discussed US East Coast at $37.00-$38.00 cwt loaded truck.
In Houston, contacts say rebar exports from Mexico remain a non-starter from a supply standpoint, as local Mexican mills wait for lower local steel pricing to develop to avoid potential anti-dumping allegations from the US. Pricing in the local Houston market remains flat to a week ago at an average $40.50 cwt ($893/mt or $810/nt), market insiders said.
Looking at other long products, in the wide flange beams market, insiders commented that mills have been "very aggressive "on pricing though values remained stable from previous levels at $47.50 cwt ($1,047/mt or $950/nt). Overseas pricing is discussed in the "high-40s" market insiders said.
Merchant Bar Quality steel (MBQ) is discussed flat at $49.00-$51.00 cwt. ($1,080-$1,124/mt or $980-$1,020/nt) with imports from Mexico and Canada meeting contract requirements, insiders said. 
