US domestic ferrous scrap trading for February largely concluded by Wednesday with shredded and primes grades of scrap benefitting the most from supply and demand dynamics, though as the trade progressed in some regions throughout the southeast shred lost some of its initial momentum registered in larger tonnage sales done early on in the trade.
Higher finished steel prices, nominally improved demand and ongoing supply tightness underpinned the wider trading activity in February, sources said. Although cut grade supply, especially #1 HMS proved mostly ample, mills reported the most difficulty in procuring shredded scrap as increases $30-50/gt in January failed to pull in sufficient flows over the course of the month.
This teed up larger gains on that grade and subsequently set the stage for at least equal increases to primes. Market participants remained metered on their outlooks for the March trade noting that stability in pricing could largely hinge on the export market, which has been at a standstill this week following large earthquakes in southwestern Turkey.
Uncertainty over how this event will impact the short-term export market and sales volumes off the US east coast prompted most to take a neutral stance on the March market, though some cited that stronger finished steel order books and gains in flat-rolled finished steel pricing could help to support scrap demand again next month, while inbound scrap flows across most regions remains seasonally lackluster.
Midwest
Midwest regions largely surpassed trends set out by Detroit mills late last week as tight supplies of shredded and 5ft P&S scrap supported gains.
Argus assessed all grades of scrap in Detroit up $20/gt on 7 February. #1 busheling and shredded scrap prices were up $30/gt across Chicago, Cincinnati-Indianapolis and the Quad Cities in February.
Market participants widely cited persistent winter weather related curbs to inbound shredder feed flows and consistent mill demand for the strength in shredded prices. Despite the relatively tepid demand for prime grades, suppliers were able to notch $30/gt increases on #1 busheling as well, sustaining the trend of widening out spreads against shredded scrap towards more typical levels.
In Chicago, 5ft P&S prices rose by $30/gt to $415/gt as mill demand outpaced supplies. Sources mainly cited a noticeable bump in mill demand but to a lesser degree a lack of demolition activity cutting into supply for the stand-out rise in the grade this month.
Gains were limited by pushback from key buyers to reflect the wider US trend, a handful of mill outages, and efforts by some to reign in high-priced springboard sales, which dominated regions like the Quad Cities in January.
In Denver, ferrous trading was atypically strong at up $30/gt across grades, marking the high-water level across the country, as concerns over a couple current and upcoming shredder outages could leave the region shy on volumes.
Southeast
Trading activity in the US southeast settled today with pricing mixed across grades and geographic region more so than in recent monthly settlements.
Some large suppliers were able to synch elevated prices early in the trade for higher volume packages of shred, though these levels were not ubiquitous across the regions with some consumers able to dig their heels in at lower price points. The mixed pricing trends on shred was most evident outside of the river market with consumers in Birmingham securing shred anywhere from up $20-30/gt, while in the Carolinas buyers were able to dig their heels in and only pay up $20/gt from the previous month.
Argus assessed #1 busheling prices at $475/gt in Birmingham and $485/gt in Northeast Arkansas, both up $30/gt from the previous month while shred was assessed at $455/gt in both regions, which was up $25/gt in Birmingham and up $30/gt in Northeast Arkansas. Suppliers noted that in Birmingham the shred market gradually lost steam after the higher volume packages were purchased with medium to small shredders mostly only able to achieve up $20-25/gt.
Some noted that a pause in export activity following large earthquakes in southwestern Turkey early this week removed momentum from the coastal markets, including the Carolinas and ultimately supported consumers to throttle shred purchasing prices to around up $20/gt from the previous month in the region. Competition on the river market though remained stiff though with consumers mostly forced to pay up $30/gt for shred and #1 busheling, while cut grades registered mixed movements.
Machine shop turnings prices also registered wide variability in pricing and trends across the southern markets with mills securing the grade at flat-to-up $20/gt from the previous month and prices across all three regions ranging from $210-230/gt delivered mill.
